Question 1

The interest percent charged by the Fed on loans to depository institutions is knows as the

Accepted Answer

A)  discount rate.
B)  prime rate.
C)  federal funds rate.
D)  commercial paper rate.
E)  CD rate.F) B) and C)
G) B) and E)

Question 2

A tight monetary policy tends to ____________ our net exports.

Accepted Answer

The answer of A tight monetary policy tends to ____________...

Question 3

The Federal Reserve System

Accepted Answer

A)  regulates not only banks but some of the other financial institutions.
B)  is directly controlled by the President.
C)  regulates all financial institutions in the United States.
D)  controls the fiscal policy of the federal government.E) A) and C)
F) B) and D)

Question 4

The growth primary growth stimulus provided to the economy through monetary policy comes from the ___________ sector.

Accepted Answer

A)  government
B)  business
C)  consumer
D)  import/ExportE) A) and B)
F) A) and C)

Question 5

A reserve ratio of 10% means that the deposit expansion multiplier is ________.

Accepted Answer

The answer of A reserve ratio of 10% means that...

Question 6

The most detrimental effect of the 1999 repeal of the Glass-Steagall Act was that it

Accepted Answer

A)  was a major contributor to the financial crisis of 2008.
B)  was a major detriment to mergers of financial institutions.
C)  American financial institutions were less able to compete with their European counterparts.
D)  increased the differentiation among banks,securities firms,and insurance companies.E) A) and D)
F) B) and D)

Question 7

The deposit expansion multiplier on bank reserves is

Accepted Answer

A)  the reserve requirement.
B)  one minus the reserve requirement.
C)  one.
D)  one divided by the reserve requirement.E) All of the above
F) C) and D)

Question 8

Assume that a bank has $2,000 in total reserves and $10,000 in checkable deposits and the required reserve ratio on checkable deposits is 20%.This bank's excess reserves equal

Accepted Answer

A)  $500.
B)  $250.
C)  $750.
D)  zero.E) B) and D)
F) B) and C)

Question 9

If a bank pays 12% interest,and that bond has a selling price of $1,200 and a face value of $1,000,how much interest does it pay?

Accepted Answer

The answer of If a bank pays 12% interest,and that...

Question 10

The three goals of monetary policy are (1)________; (2)________;and (3)_______.

Accepted Answer

relatively full empl...

Question 11

The Fed increases the money supply by buying securities for $300 million.The impact of this increase,in the long-run,would be to

Accepted Answer

A)  raise the average price level and increase the level of real GDP.
B)  raise the average price level,but real GDP (output) would stay the same.
C)  raise the real supply of loanable funds,lower the interest rate,and increase the demand for output.
D)  raise the real supply and demand for loanable funds with an increase in the interest rate.E) A) and B)
F) All of the above

Question 12

When a bank loan is repaid the supply of money

Accepted Answer

A)  is constant,but its composition will have changed.
B)  is decreased.
C)  is increased.
D)  may either increase or decrease.E) A) and D)
F) All of the above

Question 13

If the Westminster National Bank has total deposits of $200 billion,has $50 billion in reserves with the Federal Reserve System,and at the same time is required to allocate 20% of its total deposits as required reserves,what are its excess reserves?

Accepted Answer

A)  $50 billion
B)  $150 billion
C)  $10 billion
D)  $90 billionE) All of the above
F) A) and D)

Question 14

The reserve requirement for time deposits with original maturities of less than 18 months is _____%.

Accepted Answer

The answer of The reserve requirement for time deposits with...

Question 15

There is virtually no difference between

Accepted Answer

A)  primary reserves and secondary reserves.
B)  secondary reserves and required reserves.
C)  required reserves and primary reserves.D) B) and C)
E) A) and C)

Question 16

Actual reserves minus required reserves equals

Accepted Answer

A)  the required reserve ratio.
B)  actual reserves.
C)  vault cash plus deposits at Fed District Banks.
D)  excess reserves.E) B) and D)
F) C) and D)

Question 17

Which of the following cities in NOT the location of a Federal Reserve Bank?

Accepted Answer

A)  Salt Lake City
B)  Kansas City
C)  St.Louis
D)  San Francisco
E)  BostonF) All of the above
G) A) and E)

Question 18

The Federal Reserve conducts

Accepted Answer

A)  only monetary policy.
B)  only fiscal policy.
C)  both monetary and fiscal policy.
D)  neither monetary nor fiscal policy.E) A) and C)
F) A) and B)

Question 19

An increase in the reserve ratio ______ the size of the monetary multiplier.

Accepted Answer

The answer of An increase in the reserve ratio ______...

Question 20

The monetary policy weapon least often used by the Fed is ___________.

Accepted Answer

changing r...

Exam 14: The Federal Reserve and Monetary Policy

If the Westminster National Bank has total deposits of $200 billion,has $50 billion in reserves with the Federal Reserve System,and at the same time is required to allocate 20% of its total deposits as required reserves,what are its excess reserves?

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An increase in the reserve ratio ______ the size of the monetary multiplier.

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The deposit expansion multiplier on bank reserves is

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There is virtually no difference between

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Actual reserves minus required reserves equals

Correct AnswerverifiedShow Answer

The monetary policy weapon least often used by the Fed is ___________.

Correct Answerverifiedchanging r...View AnswerShow Answer

The growth primary growth stimulus provided to the economy through monetary policy comes from the ___________ sector.

Correct AnswerverifiedShow Answer

A reserve ratio of 10% means that the deposit expansion multiplier is ________.

Correct AnswerverifiedShow Answer

The Fed increases the money supply by buying securities for $300 million.The impact of this increase,in the long-run,would be to

Correct AnswerverifiedShow Answer

The Federal Reserve System

Correct AnswerverifiedShow Answer

Which of the following cities in NOT the location of a Federal Reserve Bank?

Correct AnswerverifiedShow Answer

When a bank loan is repaid the supply of money

Correct AnswerverifiedShow Answer

The most detrimental effect of the 1999 repeal of the Glass-Steagall Act was that it

Correct AnswerverifiedShow Answer

The reserve requirement for time deposits with original maturities of less than 18 months is _____%.

Correct AnswerverifiedShow Answer

If a bank pays 12% interest,and that bond has a selling price of $1,200 and a face value of $1,000,how much interest does it pay?

Correct AnswerverifiedShow Answer

Assume that a bank has $2,000 in total reserves and $10,000 in checkable deposits and the required reserve ratio on checkable deposits is 20%.This bank's excess reserves equal

Correct AnswerverifiedShow Answer

The three goals of monetary policy are (1)________; (2)________;and (3)_______.

Correct Answerverifiedrelatively full empl...View AnswerShow Answer

A tight monetary policy tends to ____________ our net exports.

Correct AnswerverifiedShow Answer

The Federal Reserve conducts

Correct AnswerverifiedShow Answer

The interest percent charged by the Fed on loans to depository institutions is knows as the

Correct AnswerverifiedShow Answer

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The three goals of monetary policy are (1)__; (2);and (3)_.

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