Econ 3229 Ch 16

17 Questions | Total Attempts: 42

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Econ 3229 Ch 16

Questions and Answers
  • 1. 
    1. The Federal Reserve was created in: 
    • A. 

      A. 1929

    • B. 

      B. 1913

    • C. 

      C. 1909

    • D. 

      D. 1945

  • 2. 
    2. Member banks of the Federal Reserve System include: 
    • A. 

      A. Only nationally chartered banks

    • B. 

      B. All state chartered banks with assets exceeding $100 million

    • C. 

      C. Nationally chartered banks and state chartered banks that decide to join

    • D. 

      D. Nationally chartered banks and all state chartered banks

  • 3. 
    3. The number of regional Federal Reserve Banks is: 
    • A. 

      A. Nine

    • B. 

      B. Seven

    • C. 

      C. Five

    • D. 

      D. Twelve

  • 4. 
    4. How many members belong to the board of directors for each of the Reserve Banks of the Fed? 
    • A. 

      Seven

    • B. 

      Nine

    • C. 

      Twelve

    • D. 

      Fourteen

  • 5. 
    5. Buying and selling U.S. Treasury Securities for the Fed's own portfolio is called: 
    • A. 

      Managing the float

    • B. 

      Discount buying

    • C. 

      Open market operations

    • D. 

      Reserve adjustment

  • 6. 
    6. The Governors of the Federal Reserve System are appointed by the: 
    • A. 

      Member banks from their home district

    • B. 

      Board of directors of the reserve bank from their home district

    • C. 

      President of the united states

    • D. 

      Chairman of the federal reserve system

  • 7. 
    7. The Chairman of the Board of Governors: 
    • A. 

      Serves a four-year term that cannot be renewed

    • B. 

      Is selected from the Board of Governors, appointed by the U.S. President

    • C. 

      Serves the same four-year term as the U.S. President

    • D. 

      Serves an eight-year term

  • 8. 
    8. The Board of Governors of the Fed performs each of the following functions, except: 
    • A. 

      Analyzing financial and economic conditions

    • B. 

      Setting the reserve requirement

    • C. 

      Approving bank merger applications

    • D. 

      Making discount loans

  • 9. 
    9. The Chairman of the FOMC is: 
    • A. 

      The Secretary of the Treasury

    • B. 

      The Vice-Chairman of the Board of Governors

    • C. 

      The Chairman of the Board of Governors

    • D. 

      The President of the New York Fed

  • 10. 
    10. The interest rate that the FOMC currently chooses to control is: 
    • A. 

      The federal funds rate

    • B. 

      The 30 year treasury bond rate

    • C. 

      The discount rate

    • D. 

      The prime rate

  • 11. 
    11. The primary purpose of meetings of the FOMC is to: 
    • A. 

      Set the required reserve rate

    • B. 

      Set the discount rate

    • C. 

      Decide on the target interest rate

    • D. 

      Set the prime rate

  • 12. 
    12. The attendees at the FOMC meetings receive information prior to the meetings that is contained in books with colorful names. The information that is released to the public prior to the meetings is from the:  
    • A. 

      Blue book only

    • B. 

      Beige book only

    • C. 

      Blue and green books, but not the beige book

    • D. 

      Beige and blue books but not the green book

  • 13. 
    13. Which of the books used at the FOMC meetings the Board staff's economic forecast for the next few years? 
    • A. 

      Blue book

    • B. 

      Beige book

    • C. 

      Green book

    • D. 

      Both the beige and blue books

  • 14. 
    14. Once the FOMC meetings adjourn, the public is made aware of the FOMC's decision: 
    • A. 

      Immediately after the meeting

    • B. 

      Forty-eight hours after the meeting adjourns

    • C. 

      Within five business days

    • D. 

      Twenty-four hours after the meeting adjourns

  • 15. 
    15. Criteria used to judge a central bank's independence include each of the following, except: 
    • A. 

      Budgetary independence

    • B. 

      Long terms for members

    • C. 

      Cabinet or ministry level of authority

    • D. 

      Irreversible decisions

  • 16. 
    16. Most of the Fed's income is: 
    • A. 

      Paid to member banks in the form of a dividend

    • B. 

      Sent to the FDIC to shore up the depositor insurance fund

    • C. 

      Returned to the U.S. Treasury

    • D. 

      Used to build the Fed's portfolio of securities

  • 17. 
    17. The objectives set for the Fed by Congress are: 
    • A. 

      Very specific; this adds to the Fed's accountability

    • B. 

      By design, quite vague, allowing the Fed to really set its own goals

    • C. 

      Specific regarding inflation, but vague on all other goals

    • D. 

      Specific on the growth rate for the economy, but vague on all other objectives

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