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11.Federal Reserve float

a.is the “lag time” required for monetary policy to take effect

b.represents a net extension of credit by the Fed, which increases bank reserves.

c.represents a net liability of the Fed.

d.is DACI minus CIPC.

 

12.When the New York Fed sells Treasury securities to a securities dealer

a.depository institutions deposits in the Fed decrease.

b.depository institutions deposits in the Fed increase.

c.the deposit balance of the security dealer in its bank decreases.

d.both a and c above.

 

13.Which Fed action does NOT directly increase total reserves in the banking system?

a. Lowering the Discount Rate

b. Lowering reserve requirements

c. Buying U.S. Government securities on the open market

d. None of the above

 

14.To increase the money supply immediately but just slightly, the Fed would most likely

a. Buy securities on the open market

b. Lower the Discount Rate

c. Lower reserve requirements

d. Any of the above would be suitable for this purpose.

 

15.Reserve requirements apply to

a. National banks

b. State banks

c. Savings-and-loan associations

d. All of the above

 

16.The Fed’s primary tools of monetary policy include all the following except

a.changing the discount rate.

b.open market operations.

c.adjusting  reserve requirements.

d.changes in the Federal Funds rate.

 

17.The 12 Federal Reserve Banks are

a. Important and autonomous components of a “decentralized central bank”

b. Important components of the Fed, but no longer very autonomous

c. Neither important nor autonomous

d. All permanently voting members of the FOMC

 

18.The purchase of government securities by the Fed will

a.decrease the money supply.

b.increase security prices.

c.increase interest rates.

d.decrease credit availability.

 

19.Which of the following is in the correct historical order?

a. Second Bank of the United States, Federal Reserve Act, Crash of 1907

b. Crash of 1907, Federal Reserve Act, National Banking Acts

c. First Bank of the United States, Crash of 1907, National Banking Acts

d. Second Bank of the United States, National Banking Acts, Federal Reserve Act

 

20.The Fed’s most visible monetary tool is probably

a.open market operations.

b.change in reserve requirements.

c.Reg Z.

d.discount rate policy

 

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