Functions Of The Fed

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Question 1

Free

Multiple Choice

Which of the following is not a major component of the Federal Reserve System?

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member banks

Federal Open Market Committee

Securities and Exchange Commission

Board of Governors

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Question 2

Free

Multiple Choice

As a result of the Financial Reform Act of 2010, the ____ was established to regulate financial products and services.

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Federal Advisory Committee

Federal Open Market Committee

Consumer Financial Protection Bureau

Board of Governors

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Question 3

Free

Multiple Choice

Which of the following is not an activity of Fed district banks?

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clearing checks

replacing old currency

providing loans to depository institutions

acting as an intermediary to match up lenders and borrowers in the stock market

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Question 4

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Multiple Choice

All ____ are required to be members of the Federal Reserve System.

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state banks

national banks

savings and loan associations

finance companies

A and B

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Question 5

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Multiple Choice

The ____ is made up of seven individual members, and each member is appointed by the president of the United States.

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Board of Governors

Federal Reserve district bank

Federal Open Market Committee (FOMC)

Securities and Exchange Commission

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Question 6

Multiple Choice

Which of the following is currently a main role of the Federal Reserve's Board of Governors?

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regulating commercial banks

regulating foreign trade

controlling monetary policy

A and C

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Question 7

Multiple Choice

With regard to monetary policy, which of the following is under the direct control of the Federal Reserve's Board of Governors?

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revising reserve requirements for depository institutions

authorizing changes in the amount of borrowing by the Treasury

monitoring the stock market for insider trading

monitoring the derivatives market for illegal trading strategies

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Question 8

Multiple Choice

The ____ rate is the interest rate charged on the Fed's short-term loans to depository institutions.

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federal funds

prime

primary credit lending

real

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Question 9

Multiple Choice

Which of the following is an action that the Fed uses to increase or decrease the money supply?

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buying or selling Treasury securities in the secondary market

adjusting the tax rate imposed on income earned on Treasury securities

adjusting the coupon rate on Treasury bonds

selling Treasury securities in the primary market

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Question 10

Multiple Choice

Total funds of commercial banks will initially by the dollar amount of securities by the Fed.

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increase; purchased

increase; sold

decrease; purchased

A and B

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Question 11

Multiple Choice

The purchase of government securities by someone other than the Fed results in

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an overall increase in funds among commercial banks.

an overall decrease in funds among commercial banks.

offsetting changes in funds at commercial banks.

an increase in securities maintained by the Fed.

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Question 12

Multiple Choice

As the supply of funds in the banking system , the federal funds rate .

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increases; declines

increases; increases

declines, declines

none of the above

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Question 13

Multiple Choice

Repurchase agreements are purchased by the Fed to

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temporarily decrease the aggregate level of bank funds.

permanently increase the aggregate level of bank funds.

permanently decrease the aggregate level of bank funds.

temporarily increase the aggregate level of bank funds.

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Question 14

Multiple Choice

When open market operations are used to bank funds, the yield on debt instruments .

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reduce; decreases

reduce; increases

increase; increases

none of the above

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Question 15

Multiple Choice

____ open market operations offset the impact of other conditions that affect the level of funds.

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Active

Passive

Dynamic

Defensive

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Question 16

Multiple Choice

Credit may be used for any purpose and is available only to depository institutions that meet specific requirements for financial soundness.

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Primary

Secondary

Tertiary

None of the above

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Question 17

Multiple Choice

To decrease the money supply, the Fed could the reserve requirement ratio.

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increase

stabilize

reduce

eliminate

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Question 18

Multiple Choice

The the reserve requirement ratio, the the ultimate effect of any initial increase in the money supply.

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lower; less

lower; greater

greater; less

B and C

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Question 19

Multiple Choice

The is directly responsible for controlling money supply growth.

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Federal Advisory Council

FOMC

Board of Governors

President of the United States

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Question 20

Multiple Choice

Assume that the reserve requirements ratio is 15 percent. An initial injection of $150 million could result in a maximum change in the money supply of

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$150 million.

$1 billion.

$1 million.

$22.5 million.

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Functions Of The Fed

Which of the following is not a major component of the Federal Reserve System?

As a result of the Financial Reform Act of 2010, the ____ was established to regulate financial products and services.

Which of the following is not an activity of Fed district banks?

All ____ are required to be members of the Federal Reserve System.

The ____ is made up of seven individual members, and each member is appointed by the president of the United States.

Which of the following is currently a main role of the Federal Reserve's Board of Governors?

With regard to monetary policy, which of the following is under the direct control of the Federal Reserve's Board of Governors?

The ____ rate is the interest rate charged on the Fed's short-term loans to depository institutions.

Which of the following is an action that the Fed uses to increase or decrease the money supply?

Total funds of commercial banks will initially ____ by the dollar amount of securities ____ by the Fed.

The purchase of government securities by someone other than the Fed results in

As the supply of funds in the banking system ____ , the federal funds rate ____ .

Repurchase agreements are purchased by the Fed to

When open market operations are used to ____ bank funds, the yield on debt instruments ____ .

____ open market operations offset the impact of other conditions that affect the level of funds.

Credit may be used for any purpose and is available only to depository institutions that meet specific requirements for financial soundness.

To decrease the money supply, the Fed could the reserve requirement ratio.

The the reserve requirement ratio, the the ultimate effect of any initial increase in the money supply.

The is directly responsible for controlling money supply growth.

Assume that the reserve requirements ratio is 15 percent. An initial injection of $150 million could result in a maximum change in the money supply of

Total funds of commercial banks will initially by the dollar amount of securities by the Fed.

As the supply of funds in the banking system , the federal funds rate .

When open market operations are used to bank funds, the yield on debt instruments .