QUESTION 1
Commercial bank reserves held at a Federal Reserve Bank are a liability of the commercial bank and an asset of the Federal Reserve.
True
False
QUESTION 2
During normal economic times, the Federal Reserve has primarily influenced overall financial conditions by adjusting the federal funds rate. The Fed Funds rate is the rate the U.S. Government charges banks for short term credit.
True
False
QUESTION 3
Everything else held constant, a decrease in holdings of excess reserves will mean
a decrease in checkable deposits. |
||
an increase in the money supply. |
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an increase in discount loans. |
||
a decrease in the money supply. |
QUESTION 4
Federal Reserve Notes are assets of the Federal Reserve System.
True
False
QUESTION 5
Following its meeting in January 2012, the FOMC issued a statement regarding its longer-run goals and monetary policy strategy. The FOMC noted in its statement that the Committee judges that inflation at the rate of 0% percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve's statutory mandate.
True
False
1. The given statement is False because commercial Bank reserves held at a federal reserve Bank is an asset to the commercial Bank because these funds are cash belonging to them and these funds are the claim the commercial banks have against the FED. But these funds are liabilities to the federal reserve because they owe these funds to the commercial banks.
Answer: False
QUESTION 1 Commercial bank reserves held at a Federal Reserve Bank are a liability of the...
-0- If the Federal Reserve Bank sells $45 million worth of securities to a commercial bank, then the __in the economy will by $45 million. reserves, increases reserves, decrease currency in circulation; descrease currency in circulation; increase Question 4 1 pts Using the simply money multiplier model, what quantity of securities must the Federal Reserve purchase to generate an increase in the size of checkable deposits by $22,500, assuming the required reserve ratio is 4%? 810 aso
8. Federal funds rate targeting Aa Aa In conducting monetary policy, the Federal Open Market Committee (FOMC) targets a Federal funds rate and the Federal Reserve Bank of New York uses open-market operations to achieve and maintain the target rate. Suppose that the following graph shows the demand for Federal funds. Use the orange line (square symbols) to plot the supply of Federal funds (also called "the supply of excess reserves") when the FOMC targets a Federal funds rate of...
Question 33 2 Lending temporary excess reserves held at the Federal Reserve Banks is a way that banks can partly reconcile the conflicting goals of: Stocks and flows Inputs and outputs Profit and liquidity Expansion and contraction Question 34 2 pt The multiple by which the commercial banking system can expand the supply of money is equal to: Its excess reserves The reciprocal of the discount rate The reciprocal of the reserve ratio The ratio of fixed to liquid assets...
5. The Federal Reserve's organizationWhile all members of the Federal Reserve Board of Governors vote at Federal Open Market Committee (FOMC) meetings, only of the regional bank presidents are members of the FOMC.Members of the Board of Governors are appointed for 14-year terms.There are 12 Federal Reserve banks.Its role is written into the U.S. Constitution.The Federal Reserve's primary tool for changing the money supply is . In order to increase the number of dollars in the U.S. economy (the money...
Question 1 (1 point) The amount of reserves that a commercial bank is required to hold is equal to: Question 1 options: the amount of its checkable deposits. the sum of its checkable deposits and time deposits. its checkable deposits multiplied by the reserve requirement. its checkable deposits divided by its total assets. Save Question 2 (1 point) Answer the question on the basis of the following information for the Moolah Bank. Refer to the information and assume that Moolah...
A. Required reserves are a set percentage of total reserves that must be held in cash in a bank's vault or in the bank’s reserve account at the Fed. True False B. To a bank, a checkable deposit is classified as an asset. a liability. vault cash. excess reserves. bank capita C. Money is an invention of government. True False D. Which of the following statements is true? A savings deposit is not counted in the most basic, or narrow,...
ommercial Bank has $5,000 in excess reserves, $90,000 in checkable deposit and the reserve ratio is 30 percent. The bank must have: A. $35,000 in reserves. B. $32,000 in reserves. C. $10,000 in reserves. D. 15,000 in reserves 23. Suppose a commercial bank has checkable deposits of $100,000 and the legal reserve ratio is A. are $17,000. 10 percent. If this bank has $ 17,000 in reserves, then its excess reserves: B. are $10,000. C. are $7,000. D. are $1,700...
If the Federal Reserve Bank sells $130 million worth of securities to a commercial bank, then the reserves in the economy ____ by $130 million and the monetary base ____ by $130 million. Group of answer choices decrease; decreases decrease; increases increase; decreases increase; increases
of the Federal Reserve 18. The Federal Open Market Committee (FOMC) is made up of: A) the chair of the Board of Governors along with the 12 presidents of the Fede ent of the New York al Reserve System along with Banks. B) the seven members of the Board of Governors along with the president of the Federal Reserve Bank. C) the seven members of the Board of Governors of the Federal Reserve S the three members of the Council...
The reserve requirement sets the required percentage of vault cash plus deposits with the regional Federal Reserve Banks that banks must keep for their deposits. Many banks have widespread branches and ATMs. How would the existence of branches and ATMs affect the level of excess reserves (above those required) that banks are able to hold? ATMs require a lot of vault cash, thus increasing excess reserves. ATMs increase excess reserves, which increases the money multiplier. The existence of ATMs does...