Question 1

If the Federal Open Market Committee decides to decrease the money supply,it will

Accepted Answer

A)  sell government bonds.
B)  purchase corporate bonds.
C)  purchase government bonds.
D)  reduce interest rates.E) All of the above
F) A) and B)

Question 2

A central bank's setting (or altering) of the money supply is known as

Accepted Answer

A)  open-market operation.
B)  interest rate policy.
C)  monetary policy.
D)  employment policy.E) A) and B)
F) B) and C)

Question 3

The agency responsible for regulating the money supply in the United States is

Accepted Answer

A)  the Comptroller of the Currency.
B)  the U.S.Treasury.
C)  the Federal Reserve.
D)  the U.S.Bank.E) None of the above
F) All of the above

Question 4

An open-market purchase

Accepted Answer

A)  increases the number of dollars and the number of bonds in the hands of the public.
B)  increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public.
C)  decreases the number of dollars and the number of bonds in the hands of the public.
D)  decreases the number of dollars in the hands of the public and increases the number of bonds in the hands of the public.E) All of the above
F) A) and D)

Question 5

The members of the Federal Reserve's Board of Governors

Accepted Answer

A)  are elected to office by the public every fourteen years.
B)  are nominated by the U.S.Senate banking committee and confirmed by the U.S.house of representatives.
C)  are elected by bankers in each Federal Reserve Region.
D)  are appointed by the president of the U.S.and confirmed by the U.S.Senate.E) B) and D)
F) B) and C)

Question 6

The Fed has the power to increase or decrease the number of dollars in the economy through the decisions of

Accepted Answer

A)  the Board of Governors.
B)  the FOMC.
C)  the regional Federal Reserve Bank presidents.
D)  the U.S.Treasury.E) B) and D)
F) B) and C)

Question 7

Which of the following does the Federal Reserve not do?

Accepted Answer

A)  It controls the supply of money.
B)  It acts as a lender of last resort to banks.
C)  It makes loans to any qualified business that requests one.
D)  It tries to ensure the health of the banking system.E) B) and C)
F) A) and C)

Question 8

At any meeting of the Federal Open Market Committee,that committee's voting members consist of

Accepted Answer

A)  5 Federal Reserve Regional Bank Presidents and all the members of the Board of Governors.
B)  5 Federal Reserve Regional Bank Presidents and 5 members of the Board of Governors.
C)  12 Federal Reserve Regional Bank Presidents and all the members of the Board of Governors.
D)  12 Federal Reserve Regional Bank Presidents and 5 members of the Board of Governors.E) None of the above
F) All of the above

Question 9

The president of each regional Federal Reserve Bank is appointed by

Accepted Answer

A)  the U.S.president with the approval of the Senate.
B)  the Board of Governors.
C)  the voting members of the Federal Open Market Committee.
D)  the board of directors of that regional Federal Reserve Bank.E) None of the above
F) A) and D)

Question 10

FOMC voting rights

Accepted Answer

A)  are given to all twelve regional bank presidents.
B)  ​rotate among the twelve regional bank presidents.
C)  ​rotate among the twelve regional bank presidents,except the president of the New York Fed,who always gets a vote.
D)  ​are all given to the president of the New York Fed,since all of the Fed's bond sales and purchases are conducted at the New York Fed trading desk.E) C) and D)
F) B) and D)

Question 11

Over one time horizon or another,Fed policy decisions influence

Accepted Answer

A)  inflation and employment.
B)  inflation but not employment.
C)  employment but not inflation.
D)  neither inflation nor employment.E) All of the above
F) A) and B)

Question 12

At any given time,the voting members of the Federal Open Market Committee include

Accepted Answer

A)  five of the presidents of the regional Federal Reserve banks.
B)  the president of the Federal Reserve Bank of New York.
C)  the seven members of the Board of Governors.
D)  All of the above are correct.E) A) and C)
F) A) and D)

Question 13

The Fed can influence unemployment in

Accepted Answer

A)  the short run and in the long run.
B)  the short run,but not in the long run.
C)  the long run,but not in the short run.
D)  neither the short nor the long run.E) A) and D)
F) All of the above

Question 14

The Federal Reserve

Accepted Answer

A)  was created in 1913.
B)  is the U.S.'s central bank.
C)  has other duties in addition to controlling the money supply.
D)  All of the above are correct.E) B) and D)
F) A) and B)

Question 15

Which of the following is correct concerning the FOMC?

Accepted Answer

A)  the members of the Board of Governors have the majority of the votes
B)  the New York Federal Reserve Bank District President is always a voting member
C)  all Federal Reserve Bank presidents attend the meetings
D)  All of the above are correct.E) A) and D)
F) C) and D)

Question 16

All of the presidents of the regional Federal Reserve banks

Accepted Answer

A)  attend each FOMC meeting.
B)  have voting rights at each FOMC meeting.
C)  are appointed by the president of the U.S.and confirmed by the U.S.Senate.
D)  All of the above are correct.E) B) and D)
F) C) and D)

Question 17

The Board of Governors

Accepted Answer

A)  is chaired by the U.S.Secretary of the Treasury.
B)  members are elected by the U.S.public.
C)  has 7 members.
D)  All of the above are correct.E) B) and C)
F) None of the above

Question 18

Who was appointed Chair of the Board of Governors in 2014 by President Barack Obama?

Accepted Answer

A)  Ben Bernanke
B)  Christina Romer
C)  Larry Summers
D)  Janet YellenE) All of the above
F) A) and B)

Question 19

The agency responsible for regulating the U.S.monetary system is the

Accepted Answer

A)  U.S.Treasury
B)  Federal Reserve
C)  Department of Justice
D)  Federal Trade CommissionE) B) and C)
F) A) and D)

Question 20

Which of the following is correct?

Accepted Answer

A)  The Federal Reserve has 14 regional banks.The Board of Governors has 12 members who serve 7-year terms.
B)  The Federal Reserve has 14 regional banks.The Board of Governors has 7 members who serve 14-year terms.
C)  The Federal Reserve has 12 regional banks.The Board of Governors has 12 members who serve 7-year terms.
D)  The Federal Reserve has 12 regional banks.The Board of Governors has 7 members who serve 14-year terms.E) All of the above
F) C) and D)

Exam 16: The Monetary System: The Federal Reserve System

The agency responsible for regulating the U.S.monetary system is the

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The president of each regional Federal Reserve Bank is appointed by

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The Fed can influence unemployment in

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The Board of Governors

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A central bank's setting (or altering) of the money supply is known as

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The agency responsible for regulating the money supply in the United States is

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All of the presidents of the regional Federal Reserve banks

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The Federal Reserve

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The Fed has the power to increase or decrease the number of dollars in the economy through the decisions of

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Over one time horizon or another,Fed policy decisions influence

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FOMC voting rights

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The members of the Federal Reserve's Board of Governors

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Who was appointed Chair of the Board of Governors in 2014 by President Barack Obama?

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Which of the following is correct?

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Which of the following does the Federal Reserve not do?

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At any meeting of the Federal Open Market Committee,that committee's voting members consist of

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Which of the following is correct concerning the FOMC?

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An open-market purchase

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If the Federal Open Market Committee decides to decrease the money supply,it will

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At any given time,the voting members of the Federal Open Market Committee include

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