Exam 16: The Monetary System: The Feds Tools of Monetary Control

A problem that the Fed faces when it attempts to control the money supply is that

The discount rate is

The Fed can increase the money supply by conducting open-market

If the public decides to hold less currency and more deposits in banks,bank reserves

The rate at which the Fed lends money to banks is

To increase the money supply,the Fed can

In the 19th century,when crop failures often led to bank runs,banks would make relatively fewer loans and hold relatively more excess reserves.By itself,these actions by the banks should have

The Fed can decrease the money supply by conducting open-market

Which of the following is correct?

Today,bank runs are not a major problem for the U.S.banking system because

Which of the following increase when the Fed makes open market purchases?

When the Fed buys government bonds,

Which of the following is correct?

An increase in the money supply might indicate that the Fed had

To increase the money supply,the Fed could

Suppose banks decide to hold more excess reserves relative to deposits.Other things the same,this action will cause the

When the Fed conducts open-market purchases,

During a bank run,depositors decide to hold more currency relative to deposits and banks decide to hold more excess reserves relative to deposits.

The federal funds rate is the interest rate that

During wars the public tends to hold relatively more currency and relatively fewer deposits.This decision makes reserves