Question 1.1. (TCO 2) The asset of Federal Reserve banks associated with open market operations is (Points : 3) | Federal Reserve notes. U.S. government securities. loans to member banks. float. | Question 2.2. (TCO 2) For what purposes do depository institutions keep deposits in the Federal Reserve banks? (Points : 3) | For clearing checks To satisfy reserve requirements To earn interest For clearing checks and to satisfy reserve requirements. | Question 3.3. (TCO 2) Which Fed action does not directly increase total reserves in the banking system? (Points : 3) | Lowering the Discount Rate Lowering reserve requirements Buying U.S. Government securities on the open market None of the above | Question 4.4. (TCO 2) The Fed's primary tools of monetary policy include all the following except (Points : 3) | changing the discount rate. open market operations. adjusting reserve requirements. changes in the Federal Funds rate. | Question 5.5. (TCO 2) The Federal Reserve System established (Points : 3) | a system for federal chartering of banks. a system for controlling bank note issuance. a source of liquidity for the banking system. the beginning of demand deposit accounts. | Question 6.6. (TCO 2) Which of the following can be associated with the modern objectives of the Fed? (Points : 3) | Coordinate an efficient payments mechanism. Provide an elastic money supply. Regulate the financial system. All of the above | Question 7.7. (TCO 2) Reserve requirements apply to (Points : 3) | national banks. state banks. savings-and-loan associations. All of the above | Question 8.8. (TCO 2) Using this data, answer the question below: Total Reserves $90,000,000 Reserve Requirement 5% Total Deposits $700,000,000 What is the level of excess reserves? (Points : 3) | $ 5,000,000 $ 55,000,000 $ 70,000,000 Not ascertainable | Question 9.9. (TCO 3) The monetary base will decrease when (Points : 3) | banks withdraw currency from the Fed. the Fed makes loans at the discount window. the Fed sells securities on the open market. the Fed buys securities on the open market. | Question 10.10. (TCO 3) The money supply (Points : 3) | is not exclusively controlled by the Fed. is not related to the monetary base. excludes any interest-bearing deposits. None of the above | Question 11.11. (TCO 3) An increase in excess reserves will cause (Points : 2) | the Fed Funds rate to rise. planned inventory investment to fall. depository institutions to lend more freely. foreign investors to buy more T-Bills. | Question 12.12. (TCO 3) Consumption spending should increase if (Points : 2) | financial wealth decreases. reserve requirements decrease. interest rates increase. credit availability decreases. | Question 13.13. (TCO 3) If the money supply increases too rapidly then (Points : 2) | inflationary expectations will rise. government spending will decrease. bank lending will decrease. investment spending will fall. | Question 14.14. (TCO 3) Monetary policy impacts the economy (Points : 2) | by affecting real spending directly. by affecting real spending through the financial sector. by changing interest rates and the cost of housing. All of the above | Question 15.15. (TCO 3) M2 includes (Points : 2) | currency in circulation. demand deposits. Both A and B None of the above | |