Exam 15: The Federal Reserve System and Open Market Operations

The Fed has the most control over:

An open market operation occurs when:

The Federal Reserve can influence the economy by shifting:

How many regional banks compose the Federal Reserve System?

For a given level of reserves, a decrease in the money multiplier will cause the money supply to:

Reserves held by banks are mainly held in the form of:

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

Which institution usually has the most influence over aggregate demand in the United States?

The risk that the failure of a few large financial institutions can affect the entire financial system is called:

Credit cards are included only in the M2 definition of the money supply.

What part of the money pyramid does the Fed have direct control over?

If the Fed buys government bonds, which will likely NOT increase?

An increase in money supply growth will cause the economy's AD curve to:

A bank is considered illiquid if:

Which would typically NOT occur following an increase in the money supply?

The Federal Reserve controls the Federal Funds rate through its control of:

Suppose the economy is growing faster than its long-run potential growth rate. To bring the real growth rate back to the long-run potential rate, the Fed should:

Demand deposits are:

If the average reserve ratio in the banking system is 20% and the Federal Reserve increases reserves by $50,000, what is the maximum amount the money supply can increase? Will the money supply always increase by this maximum amount? If not, why not?

Which is NOT a means of payment in the United States?