Question 1

The Chairman of the Board of Governors is chosen from among the seven governors and serves a ________,renewable term.

Accepted Answer

A)  one-year
B)  two-year
C)  four-year
D)  eight-yearE) None of the above
F) B) and C)

Question 2

On paper,the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System.

Accepted Answer

A)  less;less
B)  less;more
C)  more;less
D)  more;moreE) A) and B)
F) B) and C)

Question 3

Which of the following is an entity of the Federal Reserve System?

Accepted Answer

A)  the U.S. Treasury Secretary
B)  the FOMC
C)  the Comptroller of the Currency
D)  the FDICE) A) and B)
F) A) and C)

Question 4

Prior to 1980,member banks left the Federal Reserve System due to

Accepted Answer

A)  the high cost of discount loans.
B)  the high cost of required reserves.
C)  a desire to avoid interest rate regulations.
D)  a desire to avoid credit controls.E) None of the above
F) A) and D)

Question 5

The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district is called the

Accepted Answer

A)  beige book.
B)  green book.
C)  blue book.
D)  black book.E) C) and D)
F) A) and B)

Question 6

Banks subject to reserve requirements set by the Federal Reserve System include

Accepted Answer

A)  only nationally chartered banks.
B)  only banks with assets less than $100 million.
C)  only banks with assets less than $500 million.
D)  all banks whether or not they are members of the Federal Reserve System.E) All of the above
F) B) and D)

Question 7

Each Federal Reserve bank has nine directors. Of these ________ are appointed by the member banks and ________ are appointed by the Board of Governors.

Accepted Answer

A)  three;six
B)  four;five
C)  five;four
D)  six;threeE) B) and C)
F) B) and D)

Question 8

Under the European System of Central Banks,the Governing Council is similar in structure to the ________ of the Federal Reserve System.

Accepted Answer

A)  Board of Governors
B)  Federal Open Market Committee
C)  Federal Reserve Banks
D)  Federal Advisory CouncilE) A) and C)
F) C) and D)

Question 9

Why does the Federal Reserve Bank of New York play a special role within the Federal Reserve System?

Accepted Answer

The New York district contains the large...

Question 10

The Federal Reserve Banks are ________ institutions since they are owned by the ________.

Accepted Answer

A)  quasi-public;private commercial banks in the district where the Reserve Bank is located
B)  public;private commercial banks in the district where the Reserve Bank is located
C)  quasi-public;Board of Governors
D)  public;Board of GovernorsE) A) and D)
F) B) and C)

Question 11

Explain the similarities and differences between the European System of Central Banks and the Federal Reserve System.

Accepted Answer

The similarities between the two are in ...

Question 12

Recent research indicates that inflation performance (low inflation) has been found to be best in countries with

Accepted Answer

A)  the most independent central banks.
B)  political control of monetary policy.
C)  money financing of budget deficits.
D)  a policy of always keeping interest rates low.E) None of the above
F) B) and D)

Question 13

Members of the Executive Board of the European System of Central Banks are appointed to ________ year,nonrenewable terms.

Accepted Answer

A)  four
B)  eight
C)  ten
D)  fourteenE) B) and C)
F) All of the above

Question 14

The Federal Reserve Bank of ________ houses the open market desk.

Accepted Answer

A)  Boston
B)  New York
C)  Chicago
D)  San FranciscoE) B) and C)
F) All of the above

Question 15

All ________ are required to be members of the Fed.

Accepted Answer

A)  state chartered banks
B)  national banks chartered by the Office of the Comptroller of the Currency
C)  banks with assets less than $100 million
D)  banks with assets less than $500 millionE) All of the above
F) A) and B)

Question 16

Make the case for and against an independent Federal Reserve.

Accepted Answer

Case for:
1. An independent Federal Res...

Question 17

The trend in recent years is that more and more governments

Accepted Answer

A)  have been granting greater independence to their central banks.
B)  have been reducing the independence of their central banks to make them more accountable for poor economic performance.
C)  have mandated that their central banks focus on controlling inflation.
D)  have required their central banks to cooperate more with their Ministers of Finance.E) All of the above
F) A) and B)

Question 18

Which of the following statements comparing the European System of Central Banks and the Federal Reserve System is TRUE?

Accepted Answer

A)  The budgets of the Federal Reserve Banks are controlled by the Board of Governors,while the National Central Banks control their own budgets and the budget of the European Central Bank.
B)  The European Central Bank has similar power over the National Central Banks when compared to the level of power the Board of Governors has over the Federal Reserve Banks.
C)  Just like the Federal Reserve System,monetary operations are centralized in the European System of Central Banks with the European Central Bank.
D)  None of the above.E) A) and B)
F) None of the above

Question 19

The strongest argument for an independent Federal Reserve rests on the view that subjecting the Fed to more political pressures would impart

Accepted Answer

A)  an inflationary bias to monetary policy.
B)  a deflationary bias to monetary policy.
C)  a disinflationary bias to monetary policy.
D)  a countercyclical bias to monetary policy.E) A) and B)
F) C) and D)

Question 20

The Federal Open Market Committee usually meets ________ times a year.

Accepted Answer

A)  four
B)  six
C)  eight
D)  twelveE) A) and C)
F) All of the above

Exam 13: Central Banks and the Federal Reserve System

All ________ are required to be members of the Fed.

Correct AnswerverifiedShow Answer

Each Federal Reserve bank has nine directors. Of these ________ are appointed by the member banks and ________ are appointed by the Board of Governors.

Correct AnswerverifiedShow Answer

Recent research indicates that inflation performance (low inflation) has been found to be best in countries with

Correct AnswerverifiedShow Answer

Banks subject to reserve requirements set by the Federal Reserve System include

Correct AnswerverifiedShow Answer

The Federal Reserve Bank of ________ houses the open market desk.

Correct AnswerverifiedShow Answer

Why does the Federal Reserve Bank of New York play a special role within the Federal Reserve System?

Correct AnswerverifiedThe New York district contains the large...View AnswerShow Answer

The trend in recent years is that more and more governments

Correct AnswerverifiedShow Answer

The strongest argument for an independent Federal Reserve rests on the view that subjecting the Fed to more political pressures would impart

Correct AnswerverifiedShow Answer

The Chairman of the Board of Governors is chosen from among the seven governors and serves a ________,renewable term.

Correct AnswerverifiedShow Answer

Make the case for and against an independent Federal Reserve.

Correct AnswerverifiedCase for: 1. An independent Federal Res...View AnswerShow Answer

The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district is called the

Correct AnswerverifiedShow Answer

The Federal Open Market Committee usually meets ________ times a year.

Correct AnswerverifiedShow Answer

The Federal Reserve Banks are ________ institutions since they are owned by the ________.

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Explain the similarities and differences between the European System of Central Banks and the Federal Reserve System.

Correct AnswerverifiedThe similarities between the two are in ...View AnswerShow Answer

Which of the following statements comparing the European System of Central Banks and the Federal Reserve System is TRUE?

Correct AnswerverifiedShow Answer

Under the European System of Central Banks,the Governing Council is similar in structure to the ________ of the Federal Reserve System.

Correct AnswerverifiedShow Answer

On paper,the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System.

Correct AnswerverifiedShow Answer

Members of the Executive Board of the European System of Central Banks are appointed to ________ year,nonrenewable terms.

Correct AnswerverifiedShow Answer

Which of the following is an entity of the Federal Reserve System?

Correct AnswerverifiedShow Answer

Prior to 1980,member banks left the Federal Reserve System due to

Correct AnswerverifiedShow Answer

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Each Federal Reserve bank has nine directors. Of these are appointed by the member banks and are appointed by the Board of Governors.

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The New York district contains the large...
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Case for:
1. An independent Federal Res...
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The Federal Reserve Banks are institutions since they are owned by the .

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The similarities between the two are in ...
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On paper,the Bank of Canada has instrument independence and goal independence when compared to the Federal Reserve System.

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