Exam 15: The Federal Reserve System

The Federal Reserve controls the Federal Funds rate through its control of:

When the U.S.Treasury borrows,the borrowing is managed by the:

The Federal Reserve typically affects the real rate of interest in:

Discount rate lending occurs when the Federal Reserve:

An increase in the reserve ratio will _____ banks' ability to make loans.

The existence of the discount window makes private bank loans work more smoothly,even if the discount window isn't being used.

If the average reserve ratio in the banking system is 25% and the Fed increases bank reserves by $20,000,then the change in the money supply will be equal to $100,000.

The Federal Reserve:

If the average reserve ratio in the banking system is 25% and the Fed increases bank reserves by $20,000,then the change in the money supply will be equal to $80,000.

Monetary policy by the Fed is estimated to take _____ to have an impact on the economy.

What will happen when banks decide to increase their reserve ratios?

Which is NOT one of the three major tools the Fed uses to control the money supply?

Figure: AD and Monetary Policy Refer to the figure.Suppose a given economy starts at point A in the figure.If the Fed engages in an expansionary monetary policy,what would you expect to happen in the short run?

The Federal Reserve has direct control over:

The interest rate commercial banks charge each other on overnight loans is called the:

When a bank has short-term liabilities that are greater than its short-term assets,but overall its assets are greater than its liabilities,the bank is considered:

Which money supply component is the smallest?

What is the overnight lending rate from one bank to another?

Which is used most often by the Federal Reserve to control the money supply?

If the average reserve ratio in the banking system is 25% and the Fed increases bank reserves by $20,000,then the change in the money supply will be equal to $500,000.