Exam 4: Functions of the Fed

To decrease money supply, the Fed could ____ the reserve requirement ratio.

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

The Trading Desk is sometimes directed to ____ a sufficient amount of Treasury securities that will ____ the federal funds rate to a new targeted level set by the FOMC.

Assume that the reserve requirements ratio is 15%. An initial injection of $150 million could result in a maximum change in the money supply of

To increase the money supply growth, the Fed could

Each Federal Reserve district bank is responsible for reporting its regional conditions, and all of these reports are consolidated to compose the Beige Book.

Assume that the reserve requirement ratio is 12 percent and that the Fed uses open market operations by buying $200 million worth of Treasury securities. Assuming that banks use all funds except required reserves to make loans and that the public does not store any cash, the money supply should ____ by about ____.

The federal funds rate is the rate at which the Fed lends money directly to member banks.

The ____ is directly responsible for conducting monetary policy.

____ credit may be used for any purpose and is available only to depository institutions that meet specific requirements for financial soundness.

A criticism of the Fed's actions during the credit crisis is that it:

The Policy Directive is provided by Board of Governors to the FOMC.

The Fed's purchases of long-term Treasury securities in recent years were intended to:

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.

____ includes only 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.

The form of money consisting of currency held by the public and checkable deposits at depository institutions is called

Which of the following is currently a main role of the Federal Reserve's Board of Governors?

The ____ is directly responsible for setting reserve requirements.

The advisory committee making recommendations to the Fed about economic and banking related issues is the

Based on a 2003 policy, the primary credit lending rate is set