Question 1

Why has the Federal Reserve chairman often been called the second most important person in the nation?

Accepted Answer

A)  Because the Fed chairman has veto power over all federal spending. 
B)  Because the Fed is in control of monetary policy. 
C)  Because the Fed chairman draws the second highest salary of any official of the federal government. 
D)  Because the Fed has regulatory power over all financial markets. 
A)  Because the Fed chairman has veto power over all federal spending. 
B)  Because the Fed is in control of monetary policy. 
C)  Because the Fed chairman draws the second highest salary of any official of the federal government. 
D)  Because the Fed has regulatory power over all financial markets.

Question 2

The issue of Fed independence is most often raised by

Accepted Answer

A)  disagreement over the role the Fed should play in managing monetary policy. 
B)  the Fed's refusal to carry out the wishes of the President. 
C)  the Fed's refusal to carry out the wishes of Congress. 
D)  the public's negative reaction to Fed policy. 
A)  disagreement over the role the Fed should play in managing monetary policy. 
B)  the Fed's refusal to carry out the wishes of the President. 
C)  the Fed's refusal to carry out the wishes of Congress. 
D)  the public's negative reaction to Fed policy.

Question 3

The main argument against Fed independence is that

Accepted Answer

A)  in a democracy elected officials should make public policy. 
B)  monetary and fiscal policy would be easier to coordinate if the Fed were not independent. 
C)  the Fed has proven irresponsible on many occasions. 
D)  congressional control was tried during the 1960s and it worked well. 
A)  in a democracy elected officials should make public policy. 
B)  monetary and fiscal policy would be easier to coordinate if the Fed were not independent. 
C)  the Fed has proven irresponsible on many occasions. 
D)  congressional control was tried during the 1960s and it worked well.

Question 4

In 1913,Congress and the President did not envision that the Fed would control

Accepted Answer

A)  the money supply. 
B)  discount loans. 
C)  lender-of-last-resort activity. 
D)  broad control over most aspects of money and the banking system. 
A)  the money supply. 
B)  discount loans. 
C)  lender-of-last-resort activity. 
D)  broad control over most aspects of money and the banking system.

Question 5

All of the following help make the Fed independent of the political process EXCEPT

Accepted Answer

A)  financial independence. 
B)  chair of Fed receives a lifetime appointment. 
C)  Board members receive a long, nonrenewable appointment. 
D)  Board members' terms expire at different times, reducing the possible number of appointees by any one president. 
A)  financial independence. 
B)  chair of Fed receives a lifetime appointment. 
C)  Board members receive a long, nonrenewable appointment. 
D)  Board members' terms expire at different times, reducing the possible number of appointees by any one president.

Question 6

Why might Congress benefit from the Fed being self-financed?

Accepted Answer

A)  Self-financing increases Congressional control over the Fed. 
B)  Self-financing reduces the Fed's exposure to external pressures. 
C)  Self-financing gives the Fed an incentive to expand the money supply, which ultimately results in Congress having additional funds to spend. 
D)  Congress does not benefit from the Fed being self-financed; Congress is obliged by the Constitution to allow the Fed to be self-financed. 
A)  Self-financing increases Congressional control over the Fed. 
B)  Self-financing reduces the Fed's exposure to external pressures. 
C)  Self-financing gives the Fed an incentive to expand the money supply, which ultimately results in Congress having additional funds to spend. 
D)  Congress does not benefit from the Fed being self-financed; Congress is obliged by the Constitution to allow the Fed to be self-financed.

Question 7

Who serves as voting members of the Federal Open Market Committee (FOMC)?

Accepted Answer

Voting members of the FOMC inc

Question 8

In 2010,doubts were raised about the debt of all of the following countries EXCEPT

Accepted Answer

A)  Ireland. 
B)  Greece. 
C)  Poland. 
D)  Portugal. 
A)  Ireland. 
B)  Greece. 
C)  Poland. 
D)  Portugal.

Question 9

The Federal Reserve district banks

Accepted Answer

A)  do not engage in monetary policy. 
B)  engage in monetary policy directly through discount lending. 
C)  engage in monetary policy directly through open market operations. 
D)  engage in monetary policy directly through their membership on Federal Reserve committees. 
A)  do not engage in monetary policy. 
B)  engage in monetary policy directly through discount lending. 
C)  engage in monetary policy directly through open market operations. 
D)  engage in monetary policy directly through their membership on Federal Reserve committees.

Question 10

Which central bank gained the power to set interest rates independent of the government in the late 1990s?

Accepted Answer

A)  Bank of England 
B)  Bank of Canada 
C)  Bank of China 
D)  Federal Reserve Board 
A)  Bank of England 
B)  Bank of Canada 
C)  Bank of China 
D)  Federal Reserve Board

Question 11

Why did fewer state banks choose to become or remain members of the Federal Reserve System during the 1960s and 1970s?

Accepted Answer

A)  Nominal interest rates rose. 
B)  The required reserve ratio rose. 
C)  The discount rate rose. 
D)  Open market operations declined. 
A)  Nominal interest rates rose. 
B)  The required reserve ratio rose. 
C)  The discount rate rose. 
D)  Open market operations declined.

Question 12

The Depository Institutions Deregulation and Monetary Control Act of 1980

Accepted Answer

A)  eliminated the requirement that banks hold reserve deposits with the Fed. 
B)  required all state banks to join the Federal Reserve System. 
C)  required all banks to maintain reserve deposits with the Fed. 
D)  prohibited nonmember banks from receiving discount loans. 
A)  eliminated the requirement that banks hold reserve deposits with the Fed. 
B)  required all state banks to join the Federal Reserve System. 
C)  required all banks to maintain reserve deposits with the Fed. 
D)  prohibited nonmember banks from receiving discount loans.

Question 13

Members of the Board of Governors

Accepted Answer

A)  must resign when the President who has appointed them leaves office. 
B)  may serve no more than three consecutive four-year terms. 
C)  serve for life or good behavior. 
D)  serve one nonrenewable fourteen-year term. 
A)  must resign when the President who has appointed them leaves office. 
B)  may serve no more than three consecutive four-year terms. 
C)  serve for life or good behavior. 
D)  serve one nonrenewable fourteen-year term.

Question 14

What is included in the public statement released by the FOMC following the conclusion of its meeting?

Accepted Answer

The FOMC summarizes its view o

Question 15

What are the primary arguments for and against the independence of the Fed?

Accepted Answer

The main argument for the Fed's independ

Question 16

The national economic forecast for the next two years prepared by the staff of the Board of Governors is published in the

Accepted Answer

A)  green book. 
B)  beige book. 
C)  blue book. 
D)  Fed book. 
A)  green book. 
B)  beige book. 
C)  blue book. 
D)  Fed book.

Question 17

Which of the following cities does NOT contain a Federal Reserve bank?

Accepted Answer

A)  Cleveland 
B)  Dallas 
C)  Los Angeles 
D)  Boston 
A)  Cleveland 
B)  Dallas 
C)  Los Angeles 
D)  Boston

Question 18

Which groups were opposed to the Bank of the United States?

Accepted Answer

A)  northeastern industrial interests 
B)  northeastern financial interests 
C)  southern and western agrarian and small-business interests 
D)  exporters 
A)  northeastern industrial interests 
B)  northeastern financial interests 
C)  southern and western agrarian and small-business interests 
D)  exporters

Question 19

Which of the following is the most common goal for central banks of industrialized countries?

Accepted Answer

A)  high employment 
B)  high economic growth 
C)  low interest rates 
D)  low inflation 
A)  high employment 
B)  high economic growth 
C)  low interest rates 
D)  low inflation

Question 20

The main argument in favor of Fed independence is that

Accepted Answer

A)  interest rates would probably be lower if Congress controlled the Fed; thus hurting savers. 
B)  the Constitution requires it. 
C)  monetary policy is too important and too technical to be determined in the political arena. 
D)  congressional control of the Fed was tried during the 1960s and did not work well. 
A)  interest rates would probably be lower if Congress controlled the Fed; thus hurting savers. 
B)  the Constitution requires it. 
C)  monetary policy is too important and too technical to be determined in the political arena. 
D)  congressional control of the Fed was tried during the 1960s and did not work well.

Why has the Federal Reserve chairman often been called the second most important person in the nation?

The issue of Fed independence is most often raised by

The main argument against Fed independence is that

In 1913,Congress and the President did not envision that the Fed would control

All of the following help make the Fed independent of the political process EXCEPT

Why might Congress benefit from the Fed being self-financed?

Who serves as voting members of the Federal Open Market Committee (FOMC)?

In 2010,doubts were raised about the debt of all of the following countries EXCEPT

The Federal Reserve district banks

Which central bank gained the power to set interest rates independent of the government in the late 1990s?

Why did fewer state banks choose to become or remain members of the Federal Reserve System during the 1960s and 1970s?

The Depository Institutions Deregulation and Monetary Control Act of 1980

Members of the Board of Governors

What is included in the public statement released by the FOMC following the conclusion of its meeting?

What are the primary arguments for and against the independence of the Fed?

The national economic forecast for the next two years prepared by the staff of the Board of Governors is published in the

Which of the following cities does NOT contain a Federal Reserve bank?

Which groups were opposed to the Bank of the United States?

Which of the following is the most common goal for central banks of industrialized countries?

The main argument in favor of Fed independence is that

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

Financial Crises and Financial Regulation

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I: the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

Exam 13: The Federal Reserve and Central Banking

Why has the Federal Reserve chairman often been called the second most important person in the nation?

The issue of Fed independence is most often raised by

The main argument against Fed independence is that

In 1913,Congress and the President did not envision that the Fed would control

All of the following help make the Fed independent of the political process EXCEPT

Why might Congress benefit from the Fed being self-financed?

Who serves as voting members of the Federal Open Market Committee (FOMC)?

In 2010,doubts were raised about the debt of all of the following countries EXCEPT

The Federal Reserve district banks

Which central bank gained the power to set interest rates independent of the government in the late 1990s?

Why did fewer state banks choose to become or remain members of the Federal Reserve System during the 1960s and 1970s?

The Depository Institutions Deregulation and Monetary Control Act of 1980

Members of the Board of Governors

What is included in the public statement released by the FOMC following the conclusion of its meeting?

What are the primary arguments for and against the independence of the Fed?

The national economic forecast for the next two years prepared by the staff of the Board of Governors is published in the

Which of the following cities does NOT contain a Federal Reserve bank?

Which groups were opposed to the Bank of the United States?

Which of the following is the most common goal for central banks of industrialized countries?

The main argument in favor of Fed independence is that

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Investment Banks, mutual Funds, hedge Funds, and the Shadow Banking System

Financial Crises and Financial Regulation

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I: the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters