1 Defensive open-market operations, according to your text, generally result in rising interest rates and reduced availability of credit.

A question requiring a 'True/False' answer.(Required)

TrueFalse

2. Increased required reserves mandated by the Federal Reserve will tend to increase interest rates in the money market.

A question requiring a 'True/False' answer.(Required)

TrueFalse

3. If the Federal Reserve Board elects to lower reserve requirements depository institutions will be willing to make more loans at lower interest rates.

A question requiring a 'True/False' answer.(Required)

TrueFalse

4.If the Federal Reserve receives and acts on a request from a foreign central bank to acquire securities from private dealers, this will result in a rise in total reserves of the U.S. banking system.

A question requiring a 'True/False' answer.(Required)

TrueFalse

5. When the Fed replaces maturing Treasury securities with new issues, security prices will tend to rise and interest rates will tend to fall.

A question requiring a 'True/False' answer.(Required)

TrueFalse

6. The U.S. Treasury buys and sells U.S. Treasury securities for foreign central banks.

A question requiring a 'True/False' answer.(Required)

TrueFalse

7. If the Fed increases the margin requirement, investors can borrower a larger percentage of the cost of a stock purchase.

A question requiring a 'True/False' answer.(Required)

TrueFalse

8.Frictional unemployment occurs when the economy's growth loses momentum due to monetary policy changes, foreign competition or other external factors and employers begin to reduce their work force.

A question requiring a 'True/False' answer.(Required)

TrueFalse

9.The purchase of securities by the Fed will decrease total legal reserves.

A question requiring a 'True/False' answer.(Required)

TrueFalse

10.The Federal Reserve can keep the Federal funds interest rate at or near its desired level so long as the central bank is willing to offset changes in the demand for reserves by adjustments in the supply of nonborrowed reserves through open market operations.

A question requiring a 'True/False' answer.(Required)

TrueFalse

11. If the Federal Reserve sells securities to depository institutions, one of the following events is not likely to occur, according to the discussion in your text. Which event is not likely to occur?

A multiple-choice question with one possible answer.(Required)

1. Total reserves of depository institutions will fall
2. Loans and investments will decrease
3. Excess reserves will decline, at least temporarily
4. All of the above are likely to occur following the open-market sales described
5. Interest rates will fall

12. When central bank officials issue letters and public statements in an effort to persuade individuals and institutions to follow what the central bank regards as more desirable behavior, this policy tool is called

A multiple-choice question with one possible answer.(Required)

1. Moral suasion
2. None of the above
3. Regulation D
4. Margin announcement
5. Open market operation

13.The most flexible policy tool available to many of the world's central banks is

A multiple-choice question with one possible answer.(Required)

1. the reserve requirement
2. Moral suasion
3. Discounted rate
4. The special and selective credit controls
5. Open market operations

14. When the Federal Reserve conducts purchases and sales of securities on behalf of foreign central banks these are known as Surrogate open-market operations.

A question requiring a 'True/False' answer.(Required)

True/ False