Question 1

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) A) and B)
F) C) and D)

Question 2

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) B) and C)

Question 3

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) C) and D)

Question 4

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) A) and B)
F) None of the above

Question 5

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) B) and C)
F) A) and B)

Question 6

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) B) and D)

Question 7

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 B)
F) C) and D)

Question 8

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

Accepted Answer

relatively full empl...

Question 9

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) None of the above
E) B) and C)

Question 10

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) A) and D)
F) A) and C)

Question 11

A tight monetary policy tends to ____________ our net exports.

Accepted Answer

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

Question 12

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 D)
F) None of the above

Question 13

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) C) and D)
G) A) and C)

Question 14

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

Accepted Answer

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

Question 15

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 16

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) C) and D)
F) A) and C)

Question 17

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 18

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 19

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) C) and D)
F) B) and D)

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

When a bank loan is repaid the supply of money

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

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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.

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

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

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

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

Correct Answerverifiedchanging r...View AnswerShow Answer

There is virtually no difference between

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The Federal Reserve System

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The Federal Reserve conducts

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

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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

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Actual reserves minus required reserves equals

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The deposit expansion multiplier on bank reserves is

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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?

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

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

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

Correct AnswerverifiedShow Answer

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

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relatively full empl...
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changing r...
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