Exam 13: The Federal Reserve System

The term auction facility (TAF)program was instituted by the Federal Reserve to deal with the ________________________.This program gave banks ____________ options when it comes to borrowing from the Fed.

Under a free banking arrangement,when people increase the demand for money a process would begin which would end with a(n)_________________ in the supply of money,______________ government intervention.

The Federal Reserve Bank of Minneapolis once chartered a small airplane to deliver money to a commercial bank that was experiencing a "mad run" on the bank.

To expand the money supply the Fed could lower the required reserve ratio,lower the discount rate,or purchase government securities.

Which of the following will increase the money supply?

Which of the following will increase the money supply?

When the Fed purchases securities from a bank,it __________ reserves and ____________ the money supply.

A discount loan is a loan the Federal Reserve makes to a commercial bank.

There is an inverse relationship between the required reserve ratio and the money supply.

The original boundaries for the Federal Reserve districts were determined based on

The interest rate that a commercial bank pays when it borrows from the Fed is the __________ rate.

The chairman of the Board of Governors of the Fed is designated by ____________________ to serve a _______ year term as chairman.

The Fed has been called "the lender of last resort" because it

List and describe five of the eight major functions or responsibilities of the Fed.

Suppose that the federal funds rate and the discount rate are equal initially at 3%.If the discount rate is then lowered to 2.5%,to whom will a bank be more likely to go for a loan: the Federal Reserve or another bank? Explain your answer in detail,and be sure to mention the impact that this situation would have on the money supply..

What is the name and make-up of the policymaking group that has the authority to conduct open market operations? Describe how the use of open market operations helps to increase or decrease the money supply.

Assuming no cash leakages and no excess reserves held by banks,a required reserve ratio of 0 percent would mean that the simple deposit multiplier is

The Board of Governors of the Federal Reserve serves on a larger policy-making group called the House Banking Committee.

To decrease the money supply,the Fed may

When the Fed sells government securities to a bank,the securities will be