10 . The Chairman of the Board of Governors:

Multiple Choice

• serves a four-year term that cannot be renewed.
• is selected from the Board of Governors, appointed by the U.S. President.
• serves the same four-year term as the U.S. President.
• serves an eight-year term.

11 . Which of the following is (are) not a permanent voting member(s) on the FOMC?

Multiple Choice

• The seven Governors of the Fed
• The Secretary of the Treasury
• The President of the Federal Reserve Bank of New York
• The chair of the Board of Governors

12 . The interest rate that the FOMC currently chooses to control is:

Multiple Choice

• the federal funds rate.
• the 30-year Treasury bond rate.
• the discount rate.
• the prime rate.

13 . The federal funds rate is the interest rate:

Multiple Choice

• the Fed charges banks who borrow from it.
• banks charge each other for overnight loans on excess reserves held at the Fed.
• the U.S. Treasury charges banks that need emergency funds.
• the FDIC charges banks that need to borrow from it to meet depositor demands.

14 . The real power in the FOMC lies with:

Multiple Choice

• the President of the New York Fed Bank.
• the System Open Market Manager.
• the Chairman of the Board of Governors.
• no single individual; all participants have an equal share of the power.

15 . The Fed's revenue comes:

Multiple Choice

• from Congressional appropriation.
• from the Department of Commerce.
• from internally generated funds from interest on securities it holds and fees charged to banks for payments system services.
• solely from taxes placed on member banks.

16 . Most of the Fed's income is:

Multiple Choice

• paid to member banks in the form of a dividend.
• sent to the FDIC to shore up the depositor insurance fund.
• returned to the U.S. Treasury.
• used to build the Fed's portfolio of securities.

17 . In general, when the Fed lowers interest rates,spending

Multiple Choice

• increases and GDP growth rates decrease
• decreases and GDP growth rates increase
• decreases and GDP growth rates decrease
• increases and GDP growth rates increase

18 . The interest rate changes that result from the FOMC meetings:

Multiple Choice

• can be altered only by Congress.
• can be altered by the Secretary of the Treasury during an economic crisis.
• cannot be changed by anyone other than the FOMC.
• can only be altered during a time of crisis by the U.S. President.

19 . During World War II, the Fed accommodated the war effort by:

Multiple Choice

• significantly curtailing credit in the economy.
• keeping bond prices high and interest rates low.
• selling any Treasury securities the public did not purchase.
• curtailing credit and keeping bond prices high.

20 . Which of the following statements best completes the following: "The Fed's independence can only be revoked by..."?

Multiple Choice

• The U.S. President
• The Secretary of the Treasury
• Congress
• Changing the U.S. Constitution