Econ test 2
Liquidity
Risk
Wealth
Expected Returns
Supply of; rise; fall
Supply of; fall; rise
Demand for; rise; fall
Damn for: fall, rise
Demand , demand
Demand, supply
Supply, demand
Supply, supply
Government budget deficits, bonds
Government budget deficits, money
Expected inflation, bonds
Expected inflation, money
Rise, liquidity
Fall, liquidity
Fall, risk
Rise, risk
The benefit from the tax-exempt status of municipal bonds is less than their default risk
The benefit from the tax-exempt status of municipal bonds exceeds their default risk
Treasury bonds are not default-free
The benefit from the tax-exempt status of municipal bonds equals their default risk
Because of the positive term premium, the yield curve will not be observed to be downward sloping
The interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds plus a term premium
The interest rate for each maturity bond is determined by supply and demand for that maturity bond
Because buyers of bonds may prefer bonds of one maturity over another, interest rates on bonds of different maturities do not move together over time
The Comptroller of the Currency
The Federal Open Market Committee
Federal Reserve Banks
The Board of Governors
San Francisco
Boston
New York
Chicago
All banks whether or not they are members of the Federal reserve system
Only Nationally chartered banks
Only banks with assets less than $500 Million
Only banks with assets less than $100 million
Chosen by the Federal Reserve Bank presidents
Never allowed to serve more than 7 year terms
Appointed by the president of United States and confirmed by the Senate as members resign
Appointed by the newly elected president of the united states, as are cabinet positions
Seven members of the Board of Governors and seven presidents of the regional Fed banks
Seven Members of the board of Governors and five presidents of the regional Fed Banks
Five senior members of the seven- member board of governors
Twelve regional Fed bank presidents and the chairman of the Board of Governors
Propose legislation that would force the fed to submit budget requests to Congress, as must other government agencies.
Instruct the General Accounting Office to audit the foreign exchange market functions of the Federal Reserve
Withhold appropriations from the Board of Governors.
Withhold appropriations from the Federal Open Market Committee
Have been granting greater independence to their central banks.
Have been reducing the independence of their central banks to make them more accountable for poor economic performance
Have required their central banks to cooperate more with their Ministers of Finance
Have mandated that their central banks focus on controlling inflation
A policy is always performed better by an elite group such as the Fed.
Political pressure would impart an inflationary bias to monetary policy
A politically insulated Fed would be more concerned with long-run objectives and thus be a defender of a sound dollar and a stable price level
A Federal Reserve under the control of Congress or the president might make the so-called political business cycle more pronounced
The most independent central banks.
Political control of monetary policy
A policy of always keeping interest rates low
Money financing of budget deficits
Banks, depositors, the central bank, and borrowers
Banks, depositors, the central bank, and the U.S Treasury
Banks, borrowers, the central bank, and the U.S Treasury
Banks, depositors, borrowers, and the U.S Treasuries
The money supply
Bank reserves
Currency in circulation
The money base
Assets of; liabilities of
Reserves of; assets of
Liabilities of; assets of
Currency in circulation by; assets of
Currency; currency
Deposits ; deposits
Currency; deposits
Deposits; currency
Sell; call in
Purchase ; extend
Purchase; call in
Sell; extend
$500
$100
$1,000
$250
Currency , required reserves
Deposits, required reserves
Currency, excess reserves
Deposits, excess reserves
$8400
$8000
$1200.8
$1200
0.601
1.67
2.5
2.0