Question 1

The most used monetary policy instrument used by the Fed is

Accepted Answer

A) open market operations 
B) changing the discount rate 
C) changing the reserve requirement 
D) none of the above 
A) open market operations 
B) changing the discount rate 
C) changing the reserve requirement 
D) none of the above

Question 2

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

Accepted Answer

A) True 
 B)False

Question 3

The closer to the required minimum the banking system maintains its reserves, the tighter the control the Fed has over the money creation process through its other instruments.

Accepted Answer

A) True 
 B)False

Question 4

Each Federal Reserve Bank has a president and first vice-president who are appointed by:

Accepted Answer

A) the Board of Governors 
B) the President of the United States 
C) the President of the United States with the advice and consent of the Senate 
D) its board of directors 
A) the Board of Governors 
B) the President of the United States 
C) the President of the United States with the advice and consent of the Senate 
D) its board of directors

Question 5

Which of the following statements would be false? The discount rate is

Accepted Answer

A) an instrument of monetary policy 
B) frequently used as a tool of fiscal policy 
C) regarded as a fine-tuning mechanism 
D) all the above are true 
A) an instrument of monetary policy 
B) frequently used as a tool of fiscal policy 
C) regarded as a fine-tuning mechanism 
D) all the above are true

Question 6

The capital stock of each Federal Reserve Bank:

Accepted Answer

A) is owned by the Board of Governors of the Fed 
B) can be used in an emergency to provide funds for the Fed 
C) is owned by members of the individual Federal Reserve Banks 
D) has been reserved for purchase of the U.S.Treasury 
A) is owned by the Board of Governors of the Fed 
B) can be used in an emergency to provide funds for the Fed 
C) is owned by members of the individual Federal Reserve Banks 
D) has been reserved for purchase of the U.S.Treasury

Question 7

The banking system of the United States is a ___________ reserve system because banks are required by the Fed to hold reserves equal to a specified percentage of their deposits.

Accepted Answer

A) required 
B) fractional 
C) proportional 
D) multiplicative 
E) none of the above 
A) required 
B) fractional 
C) proportional 
D) multiplicative 
E) none of the above

Question 8

The Federal Reserve Banks now hold reserves for:

Accepted Answer

A) branches of foreign banks 
B) only commercial banks, savings and loan associations, and credit unions 
C) all of the reserve requirements of member banks 
D) all of the reserve requirements of all depository institutions 
A) branches of foreign banks 
B) only commercial banks, savings and loan associations, and credit unions 
C) all of the reserve requirements of member banks 
D) all of the reserve requirements of all depository institutions

Question 9

Although a central bank does not necessarily operate for profit, it generally deals directly with the public.

Accepted Answer

A) True 
 B)False

Question 10

505040.Regulation Z requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

Accepted Answer

A) True 
 B)False

Question 11

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

Accepted Answer

A) True 
 B)False

Question 12

A central bank is a Federal government agency that facilitates operation of the financial system and regulates growth of the money supply.

Accepted Answer

A) True 
 B)False

Question 13

__________ directors of the Federal Reserve are appointed by the Board of Governors of the Federal Reserve System and may not be stockholders, directors, or employees of existing banks.

Accepted Answer

A) Class A 
B) Class B 
C) Class C 
D) Class D 
A) Class A 
B) Class B 
C) Class C 
D) Class D

Question 14

About one-third, of the nation's commercial banks are members of the Fed.

Accepted Answer

A) True 
 B)False

Question 15

The chairman of the Federal Reserve System:

Accepted Answer

A) is appointed by the Secretary of the Treasury 
B) serves a life term 
C) is the president of the New York Federal Reserve Bank 
D) none of the above 
A) is appointed by the Secretary of the Treasury 
B) serves a life term 
C) is the president of the New York Federal Reserve Bank 
D) none of the above

Question 16

The three primary means that the Fed can use to exercise monetary policy includes closed market operations, stabilizing reserve requirements, and freeing the Federal discount rate.

Accepted Answer

A) True 
 B)False

Question 17

The Board of Governors of the Federal Reserve establishes monetary policy by:

Accepted Answer

A) setting reserve requirements, altering the prime rate, and through federal open market operations. 
B) setting loan to value ratios, altering the discount rate, and through federal open market operations. 
C) setting reserve requirements, altering the discount rate, and through international currency transactions. 
D) setting bank profitability ratios, altering the discount rate, and through federal open market operations. 
E) none of the above 
A) setting reserve requirements, altering the prime rate, and through federal open market operations. 
B) setting loan to value ratios, altering the discount rate, and through federal open market operations. 
C) setting reserve requirements, altering the discount rate, and through international currency transactions. 
D) setting bank profitability ratios, altering the discount rate, and through federal open market operations. 
E) none of the above

Question 18

The discount rate is:

Accepted Answer

A) the rate charged a bank's best customers 
B) the rate paid by large business with good credit 
C) the rate a bank must pay to borrow from the Fed 
D) none of the above 
A) the rate charged a bank's best customers 
B) the rate paid by large business with good credit 
C) the rate a bank must pay to borrow from the Fed 
D) none of the above

Question 19

State-chartered banks:

Accepted Answer

A) automatically receive membership in the Federal Reserve System 
B) are prohibited from membership in the Federal Reserve System 
C) may be permitted to join the Federal Reserve system, given a satisfactory financial condition 
D) none of the above 
A) automatically receive membership in the Federal Reserve System 
B) are prohibited from membership in the Federal Reserve System 
C) may be permitted to join the Federal Reserve system, given a satisfactory financial condition 
D) none of the above

Question 20

The essential requirements of a well-functioning financial system include an efficient national payments system, a flexible money supply, and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

Accepted Answer

A) True 
 B)False

The most used monetary policy instrument used by the Fed is

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

The closer to the required minimum the banking system maintains its reserves, the tighter the control the Fed has over the money creation process through its other instruments.

Each Federal Reserve Bank has a president and first vice-president who are appointed by:

Which of the following statements would be false? The discount rate is

The capital stock of each Federal Reserve Bank:

The banking system of the United States is a ___________ reserve system because banks are required by the Fed to hold reserves equal to a specified percentage of their deposits.

The Federal Reserve Banks now hold reserves for:

Although a central bank does not necessarily operate for profit, it generally deals directly with the public.

505040.Regulation Z requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

A central bank is a Federal government agency that facilitates operation of the financial system and regulates growth of the money supply.

__________ directors of the Federal Reserve are appointed by the Board of Governors of the Federal Reserve System and may not be stockholders, directors, or employees of existing banks.

About one-third, of the nation's commercial banks are members of the Fed.

The chairman of the Federal Reserve System:

The three primary means that the Fed can use to exercise monetary policy includes closed market operations, stabilizing reserve requirements, and freeing the Federal discount rate.

The Board of Governors of the Federal Reserve establishes monetary policy by:

The discount rate is:

State-chartered banks:

The essential requirements of a well-functioning financial system include an efficient national payments system, a flexible money supply, and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 4: Federal Reserve System

The most used monetary policy instrument used by the Fed is

The Federal Open Market Committee directs open market operations by buying and selling government securities which are the primary instruments of exercising monetary policy.

The closer to the required minimum the banking system maintains its reserves, the tighter the control the Fed has over the money creation process through its other instruments.

Each Federal Reserve Bank has a president and first vice-president who are appointed by:

Which of the following statements would be false? The discount rate is

The capital stock of each Federal Reserve Bank:

The banking system of the United States is a ___________ reserve system because banks are required by the Fed to hold reserves equal to a specified percentage of their deposits.

The Federal Reserve Banks now hold reserves for:

Although a central bank does not necessarily operate for profit, it generally deals directly with the public.

505040.Regulation Z requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

The Federal Reserve Act of 1913 provided that all national and state-chartered banks were to become members of the Fed.

A central bank is a Federal government agency that facilitates operation of the financial system and regulates growth of the money supply.

__________ directors of the Federal Reserve are appointed by the Board of Governors of the Federal Reserve System and may not be stockholders, directors, or employees of existing banks.

About one-third, of the nation's commercial banks are members of the Fed.

The chairman of the Federal Reserve System:

The three primary means that the Fed can use to exercise monetary policy includes closed market operations, stabilizing reserve requirements, and freeing the Federal discount rate.

The Board of Governors of the Federal Reserve establishes monetary policy by:

The discount rate is:

State-chartered banks:

The essential requirements of a well-functioning financial system include an efficient national payments system, a flexible money supply, and a lending/borrowing mechanism to help alleviate liquidity problems when they arise.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters