Question 1

Open market purchases by the Fed reduce total reserves in the banking system.

Accepted Answer

A) True 
 B)False  False

Question 2

How has the power structure of the Fed changed since 1913?

Accepted Answer

The Fed has centralized as the U.S. has evolved from a confederation of regional economies to a truly national economy. The 12 Federal Reserve Banks, once largely autonomous in their respective regional districts, remain operationally important but have lost their authority to set monetary policy. They are a minority (5 votes out of 12) on the FOMC, which sets U.S. monetary policy under ultimate control of the Board of Governors.

Question 3

Reserve requirements apply only to member banks in Federal Reserve System.

Accepted Answer

A) True 
 B)False  False

Question 4

Federal Reserve regulations affect many nonbank institutions.

Accepted Answer

A) True 
 B)False

Question 5

Excess reserves cost a depository institution nothing to maintain.

Accepted Answer

A) True 
 B)False

Question 6

Though decentralized in geography, today's Fed is highly centralized in power structure.

Accepted Answer

A) True 
 B)False

Question 7

Monetary policy is a highly partisan issue.

Accepted Answer

A) True 
 B)False

Question 8

In the check-clearing system DACI usually exceeds CIPC, creating Fed float.

Accepted Answer

A) True 
 B)False

Question 9

As the Fed expands the monetary base, bank loans and investments should expand also.

Accepted Answer

A) True 
 B)False

Question 10

A primary function of the Fed is economic stabilization via control of the money supply.

Accepted Answer

A) True 
 B)False

Question 11

Why is changing the discount rate not a viable tool for conducting monetary policy?

Accepted Answer

Changes to the discount rate will affect

Question 12

Excess reserve balances pay interest; required reserve balances do not.

Accepted Answer

A) True 
 B)False

Question 13

How has the Fed's balance sheet changed since 2008? Why have these changes occurred and what are their implications?

Accepted Answer

The Fed's balance sheet has grown dramat

Question 14

The TARP program allowed the government to purchase troubled loans from banks during and after the financial crisis.

Accepted Answer

A) True 
 B)False

Question 15

The Discount Rate provides the Fed with direct control on the money supply.

Accepted Answer

A) True 
 B)False

Question 16

The most important new power granted to the Fed by the Dodd-Frank Act was to expand its power to manage systemic risk.

Accepted Answer

A) True 
 B)False

Question 17

Open Market Operations are the primary tool of monetary policy today.

Accepted Answer

A) True 
 B)False

Question 18

The Federal Open Market Committee basically establishes our nation's monetary policy.

Accepted Answer

A) True 
 B)False

Question 19

Compare and contrast the "tools of monetary policy" in terms of their relative usefulness.

Accepted Answer

The discount rate and reserve requiremen

Question 20

The Federal Reserve is independently funded and thus immune to any political pressure.

Accepted Answer

A) True 
 B)False

Open market purchases by the Fed reduce total reserves in the banking system.

How has the power structure of the Fed changed since 1913?

Reserve requirements apply only to member banks in Federal Reserve System.

Federal Reserve regulations affect many nonbank institutions.

Excess reserves cost a depository institution nothing to maintain.

Though decentralized in geography, today's Fed is highly centralized in power structure.

Monetary policy is a highly partisan issue.

In the check-clearing system DACI usually exceeds CIPC, creating Fed float.

As the Fed expands the monetary base, bank loans and investments should expand also.

A primary function of the Fed is economic stabilization via control of the money supply.

Why is changing the discount rate not a viable tool for conducting monetary policy?

Excess reserve balances pay interest; required reserve balances do not.

How has the Fed's balance sheet changed since 2008? Why have these changes occurred and what are their implications?

The TARP program allowed the government to purchase troubled loans from banks during and after the financial crisis.

The Discount Rate provides the Fed with direct control on the money supply.

The most important new power granted to the Fed by the Dodd-Frank Act was to expand its power to manage systemic risk.

Open Market Operations are the primary tool of monetary policy today.

The Federal Open Market Committee basically establishes our nation's monetary policy.

Compare and contrast the "tools of monetary policy" in terms of their relative usefulness.

The Federal Reserve is independently funded and thus immune to any political pressure.

An Overview of Financial Markets and Institutions

The Fed and Interest Rates

The Level of Interest Rates

Bond Prices and Interest Rate Risk

The Structure of Interest Rates

Money Markets 1

Bond Markets

Mortgage Markets and Mortgagebacked Securities

Equity Markets

Derivatives Markets

International Markets

Commercial Bank Operations

International Banking

Regulation of Financial Institutions

Thrift Institutions and Finance Companies

Insurance Companies and Pension Funds

Investment Banking

Investment Companies

Risk Management in Financial Institutions

Filters

Exam 2: The Federal Reserve and Its Powers

Open market purchases by the Fed reduce total reserves in the banking system.

How has the power structure of the Fed changed since 1913?

Reserve requirements apply only to member banks in Federal Reserve System.

Federal Reserve regulations affect many nonbank institutions.

Excess reserves cost a depository institution nothing to maintain.

Though decentralized in geography, today's Fed is highly centralized in power structure.

Monetary policy is a highly partisan issue.

In the check-clearing system DACI usually exceeds CIPC, creating Fed float.

As the Fed expands the monetary base, bank loans and investments should expand also.

A primary function of the Fed is economic stabilization via control of the money supply.

Why is changing the discount rate not a viable tool for conducting monetary policy?

Excess reserve balances pay interest; required reserve balances do not.

How has the Fed's balance sheet changed since 2008? Why have these changes occurred and what are their implications?

The TARP program allowed the government to purchase troubled loans from banks during and after the financial crisis.

The Discount Rate provides the Fed with direct control on the money supply.

The most important new power granted to the Fed by the Dodd-Frank Act was to expand its power to manage systemic risk.

Open Market Operations are the primary tool of monetary policy today.

The Federal Open Market Committee basically establishes our nation's monetary policy.

Compare and contrast the "tools of monetary policy" in terms of their relative usefulness.

The Federal Reserve is independently funded and thus immune to any political pressure.

An Overview of Financial Markets and Institutions

The Fed and Interest Rates

The Level of Interest Rates

Bond Prices and Interest Rate Risk

The Structure of Interest Rates

Money Markets 1

Bond Markets

Mortgage Markets and Mortgagebacked Securities

Equity Markets

Derivatives Markets

International Markets

Commercial Bank Operations

International Banking

Regulation of Financial Institutions

Thrift Institutions and Finance Companies

Insurance Companies and Pension Funds

Investment Banking

Investment Companies

Risk Management in Financial Institutions

Filters