Exam 4: Functions of the Fed

Which of the following statements is incorrect with respect to a single European monetary policy?

To increase the money supply, the Trading Desk would be instructed to sell government securities.

Total funds of commercial banks will initially ____ by the dollar amount of securities ____ by the Fed.

Members of the Board of Governors serve 14-year nonrenewable terms.

When the Trading Desk sells a sufficient amount of Treasury securities, it creates a surplus of funds in the banking system. Consequently, the federal funds rate decreases along with other interest rates.

The term "quantitative easing" refers to the Fed's

____ includes currency held by the public and checking deposits as well as savings accounts and small time deposits, money market deposit accounts, and some other items.

With regard to monetary policy, which of the following is under the direct control of the Federal Reserve's Board of Governors? ​

Repurchase agreements are purchased by the Fed to _________ the aggregate level of bank funds.

The main monetary policy goal of most central banks is to stabilize the value of the local currency against foreign currencies.

Which of the following is the most likely effect when the Fed increases the supply of funds to the banking system?

The Trading Desk's open market operations to either reduce or increase the federal funds rate are classified as ________ because they are intended to have a lasting impact on economic conditions.

The policy directive is provided by the Board of Governors to the FOMC.

As the supply of funds in the banking system ____, the federal funds rate ____.

Which of the following is NOT a major component of the Federal Reserve System?

The Fed's purchases of long-term Treasury securities during the credit crisis were intended to

The euro has been adopted by all of the major countries of Western Europe, including Switzerland and the United Kingdom.

During the credit crisis, the Fed took the unprecedented step of intervening in the stock markets to prevent the stock prices of major commercial banks from declining by more than 10 percent from the previous quarter.

The FOMC's decisions on monetary policy are rarely unanimous as one or more members usually dissent.

Which of the following is an action that the Fed uses to increase or decrease the money supply? ​