Exam 29: The Monetary System

What is the change in the money supply when the Fed purchases $700 worth of bonds and the required reserve ratio is 14 percent assuming banks hold no excess reserves?

An increase in the money supply might indicate that the Fed had

What does the Fed auction at the Term-Auction Facility?

Which of the following is not a tool of monetary policy?

The Federal Reserve is a privately operated commercial bank.

Today, bank runs are

The president of each regional Federal Reserve Bank is appointed by

Which of the following is correct?

The money supply increases when the Fed

In recent years the Federal Open Market Committee has focused on a target for

The interest rate that the Fed charges banks that borrow reserves from it is the

When the Federal Reserve conducts open-market operations to increase the money supply, it

If $300 of new reserves generates $800 of new money in the economy, then the reserve ratio is

When conducting an open-market sale, the Fed

The manager of the bank where you work tells you that your bank has $10 million in excess reserves. She also tells you that the bank has $400 million in deposits and $375 million dollars in loans. Given this information you find that the reserve requirement must be

Suppose the Federal Reserve increases bank reserves and banks lend out some of these reserves, but at some point banks still have $5 million more they wish to lend out. If the reserve requirement is 10 percent, how much more money can banks create if they lend out the remaining amount?

The legal tender requirement means that

At any given time, the voting members of the Federal Open Market Committee include

If the reserve ratio is 10 percent, the money multiplier is

In a fractional reserve economy where the required reserve ratio is 10%, must it be the case that an initial deposit of $100 increases the total money supply by $1,000? Explain.