Exam Name MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 The monetary liabilities of the Federal Reserve include 1 A securities and reserves B currency in circulation and reserves C securities and loans to financial institutions D currency in circulation and loans to financial institutions 2 The monetary base minus reserves equals 2 A discount loans B the borrowed base C the nonborrowed base D currency in circulation 3 When a bank buys a government bond from the Federal Reserve reserves in the banking system and the monetary base everything else held constant 3 A increase decreases B decrease increases C increase increases D decrease decreases 4 If the Fed decides to reduce bank reserves it can 4 A sell government bonds B purchase government bonds C print more currency D extend discount loans to banks 5 When the Federal Reserve extends a discount loan to a bank the monetary base and reserves 5 A remains unchanged increase B increases remain unchanged C increases increase D remains unchanged decrease 6 Each Federal Reserve bank has nine directors Of these are appointed by the member banks and are appointed by the Board of Governors 6 A four five B five four C three six D six three 7 An important function of the regional Federal Reserve Banks is 7 A setting margin requirements B setting reserve requirements C clearing checks D determining monetary policy 8 The Federal Open Market Committee usually meets times a year 8 A four B six C eight D twelve 9 The case for Federal Reserve independence does not include the idea that 9 A policy is always performed better by an elite group such as the Fed B a Federal Reserve under the control of Congress or the president might make the so called political business cycle more pronounced C a politically insulated Fed would be more concerned with long run objectives and thus be a defender of a sound dollar and a stable price level D political pressure would impart an inflationary bias to monetary policy 10 Goal independence is the ability of to set monetary policy 10 A the central bank instruments B Congress goals C Congress instruments D the central bank goals 1 B 2 D 3 D 4 A 5 C 6 D 7 C 8 C 9 A 10 D
View Full Document
Unlocking...