1. The Federal Reserve has taken actions in reaction the COVID-19 health/economic crisis to support the flow of credit to households and businesses.

True

False

QUESTION 2

1. Bitcoin is now counted as part of M1.

True

False

QUESTION 3

1. The following statement makes sense:

In reaction to the COVID-19 crisis the FOMC has made a commitment to reduce the SOMA of the Federal Reserve in order to pump more money into the financial system.

True

False

QUESTION 4

1. You can pay your taxes in New York State with bitcoin.

True

False

QUESTION 5

1. Base your answers on the March 03, 2020Federal Reserve issues FOMC statement

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a.htm

The risks posed by the corona virus to the economy of the United States prompted the FOMC to make interest free loans to all banks in the United States.

True

False

QUESTION 6

1. Due to COVID the balance of commercial and industrial loans on the balance sheet of Dime Community Bancshares declined between December 31^st2019 and September 30^th, 2020. This is because the bank stopped making loans and existing loans defaulted.

True

False

QUESTION 7

1. Bank W borrows $10 million from the Federal Reserve and lends out $8 million to firm X and keeps $2 million in vault cash. Firm X deposits $6 million in a checking account at Bank Y and bank Y lends out $5 million to Firm Z. Firm Z buys farm equipment with the $5 million. The farm equipment company spends the $5 million money on parts, rent, labor, interest and dividends.$4 million of the money spent on farm equipmentends up in checking accounts at various banks. The initial loan to bank W by the Fed:

Increased the money supply by more than $10,000,000.

Increased the money supply by less than $10,000,000.

Did not change the money supply.

Loans to banks by the Fed are not open market operations so they do not increase the money supply.

QUESTION 8

1. If the Board of Governors of the Federal Reserve increases the reserve requirement then the money supply will decline.

True

False

QUESTION 9

1. The Federal Reserve Bank of New York is responsible for conducting open market operations for the Federal Reserve System.

True

False

QUESTION 10

1. When banks borrow money from the Federal Reserve, these funds are called

federal loans.

Treasury funds.

federal funds.

discount loans.

QUESTION 11

1. Between February 5^th, 2020 and January 6^th, 2020, the total amount held in the SOMA account of the Federal Reserve increased by $2,905,514,181,800.

True

False

QUESTION 12 (article at bottom of page)

1. Base your answers on theMarch 03, 2020 FOMC Implementation Note

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a1.htm

The Board of Governors of the Federal Reserve voted unanimously to lower the primary discount rate by 50 basis points. The primary rate is a rate that is charged to banks that borrow from the Federal Reserve.

True

False

QUESTION 13

1. Open market purchases conducted by the Federal Reserve Bank of New York lead to an increase in bank reserves. For every $1 increase in bank reserves the money supply will increase by $1/2.

True

False

QUESTION 14

1. On March 27^thof 2020 the Federal Reserve Bank of New York began to purchase commercial mortgage-backed securities in an effort to keep capital flowing to the commercial real estate market.

True

False

QUESTION 15

1. In reaction to the COVID-19 crisis, to prevent bank runs, the FDIC increased its deposit insurance limit to $400,000.

True

False

QUESTION 16

1. Bitcoin like the dollar has the following characteristics; durability, portability, divisibility, uniformity, limited supply and acceptability. Bitcoin is money.

True

False

QUESTION 17

1. The sum of the Fed's monetary liabilities and the U.S. Treasury's monetary liabilities is called

currency in circulation.

the monetary base.

bank reserves.

the money supply.

QUESTION 18

1. Management of Dime Community Bancshares increased the allowance for loan losses from $28.441 million to $42.492 million between December 31^st2019 and September 30^th, 2020.

True

False

QUESTION 19

1. A portion of the commercial and industrial loan portfolio on the balance sheet of Dime Community Bancshares on December 31^st, 2020 were composed of Paycheck Protection Loans.

True

False

QUESTION 20

1. The FOCM has set the target Fed Funds rate at range of 0% to .25% in reaction to the economic contraction caused by the COVID-19 health/economic crisis. In order to achieve this target, the Federal Reserve Bank of New York must be actively engaged in buying financial securities on the open market.

True

False

QUESTION 21

1. Base your answers on the March 03, 2020Federal Reserve issues FOMC statement

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a.htm

The risks posed by the corona virus to the price stability and full employment in the United States prompted the FOMC to lower the target Fed Funds rate by 50 basis points to a range of 1% to 1.25%.

True

False

QUESTION 22

1. Which of the following is included in both M1 and M2?

Currency

Small-denomination time deposits

Money market deposit accounts

Savings deposits

QUESTION 23

1. The actions the Federal Reserve has taken in response to the COVID-19 pandemic is inconsistent with the Federal Reserve mandate of maximum employment and price stability.

True

False

QUESTION 24

1. This would be a sensible monetary policy:

In reaction to the COVID-19 health/economic crisis of the FOMC has decided to expand only the asset side the Federal Reserve balance sheet.

True

False

QUESTION 25

1. Between February 1^stand March 20^th,the supply of M1 in the economy has declined due to the COVID-19 crisis.

True

False

QUESTION 26

1. Since 2007 excess reserves have increased but the money supply has remained constant.

True

False

QUESTION 27 (article at bottom of page)

1. Base your answers on theMarch 03, 2020 FOMC Implementation Note

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a1.htm

The FOMC directed the trading desk at the Federal Reserve Bank of New York to conduct open market purchases of U.S. Treasury bills in order to maintain "ample banking reserves at levels at or above what they were at the beginning of September 2019.

True

False

QUESTION 28

1. The supply of Bitcoin depends on the actions of central banks.

True

False

QUESTION 29

1. Paycheck Protection loans made by Dime Community Bancshares earn interest of 1% per year for two years. Management of Dime believes that these loans are fully guaranteed by the U.S. Government.

True

False

QUESTION 30

1. The unemployment rate can not be moderated by lowering the Fed Funds rate in response to the COVID-19 crisis because many businesses are being forced to shut down.

True

False

QUESTION 31

1. The components of the U.S. M1 money supply are demand and checkable deposits plus

currency plus savings deposits.

currency.

currency plus travelers checks.

currency plus travelers checks plus money market deposits.

article for questions 12 and 27

Press Release

March 03, 2020

Implementation Note issued March 3, 2020

Decisions Regarding Monetary Policy Implementation

The Federal Reserve has made the following decisions to implement the monetary policy stance announced by the Federal Open Market Committee in itsstatementon March 3, 2020:

• The Board of Governors of the Federal Reserve System voted unanimously to set the interest rate paid on required and excess reserve balances at 1.10 percent, effective March 4, 2020.
• As part of its policy decision, the Federal Open Market Committee voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive:
• "Effective March 4, 2020, the Federal Open Market Committee directs the Desk to undertake open market operations as necessary to maintain the federal funds rate in a target range of 1 to 1-1/4 percent. In light of recent and expected increases in the Federal Reserve's non-reserve liabilities, the Committee directs the Desk to continue purchasing Treasury bills at least into the second quarter of 2020 to maintain over time ample reserve balances at or above the level that prevailed in early September 2019. The Committee also directs the Desk to continue conducting term and overnight repurchase agreement operations at least through April 2020 to ensure that the supply of reserves remains ample even during periods of sharp increases in non-reserve liabilities, and to mitigate the risk of money market pressures that could adversely affect policy implementation. In addition, the Committee directs the Desk to conduct overnight reverse repurchase operations (and reverse repurchase operations with maturities of more than one day when necessary to accommodate weekend, holiday, or similar trading conventions) at an offering rate of 1.00 percent, in amounts limited only by the value of Treasury securities held outright in the System Open Market Account that are available for such operations and by a per-counterparty limit of $30 billion per day.
• The Committee directs the Desk to continue rolling over at auction all principal payments from the Federal Reserve's holdings of Treasury securities and to continue reinvesting all principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities received during each calendar month. Principal payments from agency debt and agency mortgage-backed securities up to $20 billion per month will continue to be reinvested in Treasury securities to roughly match the maturity composition of Treasury securities outstanding; principal payments in excess of $20 billion per month will continue to be reinvested in agency mortgage-backed securities. Small deviations from these amounts for operational reasons are acceptable.
• The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency mortgage-backed securities transactions."
• In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve a 1/2 percentage point decrease in the primary credit rate to 1.75 percent, effective March 4, 2020. In taking this action, the Board approved requests to establish that rate submitted by the Boards of Directors of the Federal Reserve Banks of Minneapolis and New York.

This information will be updated as appropriate to reflect decisions of the Federal Open Market Committee or the Board of Governors regarding details of the Federal Reserve's operational tools and approach used to implement monetary policy.

More information regarding open market operations and reinvestments may be found on the Federal Reserve Bank of New York'swebsite.

Last Update: March 03, 2020