1. Which of the following is primarily responsible for controlling the money supply?
2. The U.S. Congress
3. The Federal Reserve System - in particular the FOMC
4. The U.S. Treasury

1. Which of the following compose the reserves of a commercial bank?
2. Demand deposits
3. Vault cash & deposits of the bank with the Federal Reserve
4. U.S securities and stock equity
5. Cash & U.S. securities

1. If the Fed wanted to increase the money supply, it would
2. Buy bonds and/ or reduce the reserve requirements
3. Sell bonds and/or reduce reserve requirements
4. Sell bonds and/or increase the reserve requirement

1. If you have a checking account and a loan -
2. Your loan is a bank asset and your account is a bank liability
3. Your loan is a bank liability and your account is a bank asset
4. Your loan and account are bank assets

1. If the reserve requirement is 10% and a depositor deposits $100,000 into a checking account, the bank would be able to now lend: _________________

1. The Federal Funds Market is the market where
2. The federal government raises funds to cover its budget deficit
3. Banks with excess reserves make loans to other banks seeking reserves
4. Commercial banks make loans to the Federal Reserve

1. If the Fed increases the money supply, real GDP may
2. Increase because the resulting increase in the interest rate leads to a decrease in investment
3. Increase because the resulting decrease in the interest rate leads to an increase in investment
4. Decrease because the resulting increase in the interest rate leads to a decrease in investment

1. The President of the Federal Reserve Bank of ___________is always on the FOMC
2. Washington DC
3. New York
4. San Francisco

1. The interest rate on loans is __________than the interest rate that the banks pay their depositors
2. Higher
3. Lower

1. The members of the FOMC include:
2. Board of governors
3. Five Federal Reserve District Bank Presidents
4. 7 Board Members and 5 District bank president

1. What is the current Fed Funds Rate? ______________

1. What is the current Prime Rate? ____________

1. What color is the beige book? ____________________

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1. Stocks are ownership shares in corporations and may give shareholders the right to share in any future profits that the corporation may generate.
2. True
3. False

1. Bonds are risky because of the possibility that the corporations or government bodies that issued them may default or not make promised payments.
2. True
3. False

1. Diversification is an investment strategy that seeks to reduce the overall risk facing an investment portfolio by selecting a group of assets whose risks offset each other.
2. True
3. False

1. The riskier the asset, the higher its average expected rate of return will be.
2. True
3. False

1. Cost-push inflation results in a simultaneous increase in the price level and real output.
2. True
3. False

1. Stagflation refers to a situation in which both the price level and unemployment are rising.
2. True
3. False
4. Monetarists argue the "V" in the equation of exchange is relatively stable and that a change in "M" will bring about a direct and proportional change in "PQ"
5. True
6. False

1. The traditional Philips Curve shows the
2. Inverse relationship between the rate of inflation and the unemployment rate
3. Inverse relationship between the nominal wage and real wage
4. Trade-off between the short-run and the long-run

1. Which would be an example of an economic investment
2. The sale of a stock
3. The building of a new factory
4. The buying of a mutual fund
5. The purchase of a corporate bond

1. Which type of investment is a loan contract
2. Bonds
3. Stocks
4. Actively managed mutual funds
5. Passively managed mutual funds

1. A $100 deposit into an account paying annual interest of 8%. What is the value after two years?
2. $116.64
3. $125.97
4. $136.05

1. Jamie buys 100 shares of General Electric stock for $35 a share and sells the stock one year later for $40 a share. Jamie will realize:
   1. Depreciation of $500
   2. Capital gain of $500
   3. Dividend of $500
   4. Interest payment of $500