Test
Chapter 17 - The Federal Reserve and the Money Supply
Preguntas del test (32)
1Only the Federal Reserve can create money.
- AVerdadero
- BFalso
2If the Fed increases the supply of money, unemployment increases also.
- AVerdadero
- BFalso
3The Fed can increase the money supply by buying securities.
- AVerdadero
- BFalso
4The main reason the Fed changes the discount rate is to signal investors of future short-term interest rates.
- AVerdadero
- BFalso
5National Banks have the option to be members of the Federal Reserve System.
- AVerdadero
- BFalso
6Money is defined as currency and coins only.
- AVerdadero
- BFalso
7Even though the Fed is independent of Congress, it still hesitates to make politically unpopular monetary policy decisions.
- AVerdadero
- BFalso
8If the Fed were to sell securities, total reserves in the banking system would decrease.
- AVerdadero
- BFalso
9When the Fed decreases the supply of money, the supple curve shifts left.
- AVerdadero
- BFalso
10The President of the United States and the Senate choose the members of the Board of Governors.
- AVerdadero
- BFalso
11Of its three functions, it is as a unit of account that distinguishes money from other assets.
- AVerdadero
- BFalso
12Currency held by depository institutions (banks) is added to currency circulation in the hands of the public to get total currency in circulation.
- AVerdadero
- BFalso
13A sale of government bonds by the Fed, all else the same, increase the monetary base.
- AVerdadero
- BFalso
14Monetary policy is set by the Board of Governors.
- AVerdadero
- BFalso
15If the Fed targets a monetary aggregate it is likely to lose control over the interest rate because of fluctuations in the money demand function.
- AVerdadero
- BFalso
16Which of these terms does not refer to the same bank?
- Athe Fed
- Bcentral bank
- Cmember bank
- DThe Federal Reserve Bank
17__________ is the governing body of the Federal Reserve System.
- AThe President
- BCongress
- CThe Senate
- DThe Board of Governors
18When interest rates have increase, __________?
- Ainvestments decrease
- Bunemployment decreases
- Ceconomic activity increases
- Dfirms borrow more money
19__________ influences the economy through changes in interest rates.
- AThe discount rate
- BMonetary policy
- CThe money multiplier
- DCongress
20What is the most important tool for controlling the money supply?
- Adiscount rate
- Bopen market operations
- Creserve requirements
- Dinvestment spending
21How many years is the Board of Governors appointed?
- A2
- B12
- C14
- Dlife
22Who demands the loanable funds?
- Aindividuals
- Bbusinesses
- Cgovernment
- Dall the above
23If the fed buys $350 million in government securities and the reserve requirement is 5%, what is the change that would result in the money supply?
- A$7,000 million
- B$700 billion
- C$1,750 billion
- D$175 billion
24If there is an increase in business development, the demand curve will __________?
- Ashift left
- Bshift right
- Cnot be effected
- Dincrease up
25Which of the following is not one of the four primary responsibilities of the Fed?
- ASupervising and regulating commercial banks
- BMaximizing the profit to satisfy the investors
- CHolding the US treasury checking account
- DImplementing monetary policy
26The Fed lacks complete control over the money supply because it cannot perfectly predict..
- Athe amount of discount borrowing by banks
- Bshifts from deposit to currency
- Cthe level of excess reserves held by banks
- Dall of the above
27For a given level of monetary base, a decrease in the required reserve ratio on checkable deposits will mean..
- Adecrease in the money supply
- Ban increase in the money supply
- Ca decrease in checkable deposits
- Dan increase in discount borrowing
28The money multiplier is..
- Anegatively related to high-powered money
- Bnegatively related to the required reserve ratio
- Cpositively related to holdings of excess reserve
- Dpositively related to the discount borrowing from the Fed
29According to the Loanable Funds Theory of Interest Rates, which of the following statement is true?
- Aan increase in interest rates results in greater savings
- Bthere is little relationship between the level of interest rates and the amount of new money created
- Cthe demand for loanable funds is a function of the demand for funds by individuals, business, and government
- Dall of the above are true
30Explain what happens when the money supply increases.
- AWhen the money supply increases, interest rates tend to fall. This causes firms to borrow more money to invest in new equipment and buildings.
- BSince industries are expanding, there would be an increase in jobs, which in turn would increase consumer spending.
- CAll of the above.
31What will happen to the supply curve if the Fed sells securities?
- AInterest rates will rise.
- BThis would cause the supply curve to shift left because there is a decrease in the amount of loanable funds.
- CAll of the above.
32The Federal Reserve can influence __________.
- Athe money supply
- Binterest rates
- Cpoliticians
- Dand and b
Información
- Descripción
- Test sobre Chapter 17 - The Federal Reserve and the Money Supply, creado por lseyer436 el 01/10/2015.
- Autor
- lseyer436
- Idioma
- English
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- 100
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