Test 6

A  Jerome Powell

B  Alan Greenspan

C  Janet Yellen

D  Ben Bernanke

A  a decrease in the federal funds rate and an increase in the money supply

B  a decrease in the federal funds rate and a decrease in the money supply

C  an increase in the federal funds rate and a decrease in the money supply

D  an increase in the federal funds rate and an increase in the money supply

A  the imports of the economy

B  government spending

C  tax rates

D  investment spending

A  buying government securities and lowering the reserve ratio

B  selling government securities and lowering the discount rate

C  buying government securities and lowering the discount rate

D  selling government securities and raising the discount rate

A  a restrictive monetary policy

B  an expansionary monetary policy

C  a discretionary fiscal policy

D  a prime interest rate policy

A  is charged for government bonds sold in the open market operations of the Federal Reserve

B  banks charge for loans to the most creditworthy customers

C  the Federal Reserve charges for short-term loans to commercial banks

D  banks charge for overnight use of excess reserves held at the Federal Reserve banks

A  increases the discount rate

B  increases the amount of excess reserves banks must keep

C  decreases the discount rate

D  changes required reserves to excess reserves

A  the discount rate

B  open-market operations

C  interest on reserves

D  the reserve ratio

A  The supply of money is directly related to the interest rate.

B  The total demand for money is inversely related to the interest rate.

C  A lower interest rate raises the opportunity cost of holding money.

D  Bond prices and the interest rate are directly related.

A  U.S. Treasury

B  Internal Revenue Service

C  Congress of the United States

D  Federal Reserve

A  add to the liquidity of the commercial bank and protect it against a “run” on the bank

B  provide the Fed with a means of controlling the lending ability of the commercial bank

C  provide the means by which checks drawn on the commercial bank and deposited in other commercial banks can be collected

D  protect the deposits in the commercial bank against losses

A  accepting deposits of gold for safe storage

B  using deposited gold to produce products for sale to others

C  issuing paper money in excess of the amount of gold stored with them

D  issuing receipts for the gold stored with them

A  set up the money market investor funding facility (MMIFF)

B  set up the primary dealer credit facility (PDCF)

C  set up the Troubled Asset Relief Program (TARP)

D  set up the commercial paper funding facility (CPFF)

A  underestimating the risk of losses on mortgage-backed securities

B  overstating the moral hazard problem

C  overestimating the expected profits made by oil companies

D  understating the benefits of devaluing the U.S. dollar

A  supervising the operation of banks to make sure they follow regulations and monitoring banks so they do not engage in fraud

B  acting as the fiscal agent for the federal government and issuing currency

C  setting the Fed’s monetary policy and directing the buying and selling of government securities

D  handling the Fed’s collection of checks and adjusting legal reserves among banks

A  commercial banks and thrifts as those institutions do for the public

B  federal government as does the U.S. Treasury

C  the public as do commercial banks and thrifts

D  commercial banks and thrifts as does the Federal Deposit Insurance Corporation

A  privately owned and controlled

B  publicly owned and controlled

C  publicly owned but privately controlled

D  privately owned but publicly controlled

A  controls the money supply

B  buys corporate stock

C  uses price and wage controls

D  employs fiscal policy

A  increase the purchasing power of money

B  decrease the use of money as a medium of exchange

C  decrease the conversion of money to gold

D  increase the use of money as a measure of value

A  16.67%

B  20%

C  25%

D  14.14%

A  debts, or promises to pay

B  token money

C  legal tender

D  assets of the Federal Reserve Banks

A  the confidence of the public in the ability of government to pay off the national debt

B  the willingness of banks and the government to surrender something of value in exchange for money

C  the belief of holders of money that it can be exchanged for desirable goods and services

D  the gold bullion that is stored in Fort Knox, Kentucky

A  Yes, because their value is included in the calculation of M 2.

B  No, because the card transactions are not insured by either the Federal Reserve banks or the U.S. Treasury.

C  No, because they provide a short-term loan to cardholders from a financial institution that issued the card.

D  Yes, because their value is included in the calculation of M 1.

A  a medium of exchange

B  fiat money

C  legal tender

D  token money