Exam 15: The Federal Reserve System and Open Market Operations

An increase in money growth will cause inflation to increase in:

The Term Auction Facility was set up in response to the financial crisis of 2007-2008.

The paper currency circulated in the United States is called:

The Fed has direct control over the M1 supply of money, but only indirect control over M2.

When the Fed sells government bonds in the open market:

Why does a one-dollar change in bank deposits cause a change in the money supply by more than one dollar?

Which is used most often by the Federal Reserve to control the money supply?

If banks did not hold reserves, ATMs would not function.

The Federal Reserve is one of the most independent agencies in the U.S. government.

The money multiplier is the amount the:

Bank A has $100 million in deposits, $15 million in required reserves, and $85 million in loans. Bank A's reserve ratio is:

Who was chair of Federal Reserve System during the financial crisis of 2008?

The financial crisis of 2008 illustrates that:

When the Federal Reserve buys bonds, the supply curve for bonds:

An increase in the required reserve ratio leaves banks with a need and desire to:

Holding reserves is costly for banks because:

Large private banks keep their own accounts at the Federal Reserve.

Money market mutual funds are more liquid than savings deposits.

The required reserve ratio is determined by how:

An increase in the growth rate of the money supply raises both real growth and inflation in the long run.