CH15 - CHAPTER 15 Monetary Policy Topic 1. 2. 3. 4. 5. 6....

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CHAPTER 15 Monetary Policy Topic Question numbers ___________________________________________________________________________________________________ 1. Fed balance sheet and general 1-14 2. Open-market operations 15-33 3. Reserve ratio 34-41 4. Discount rate 42-45 5. Monetary policy and the economy 46-80 6. Assessment/recent policy 81-115 7. International complications 116-131 8. AD-AS/policy summary 132-136 Last Word 137-140 True-False 141-154 ___________________________________________________________________________________________________ Multiple Choice Questions Fed balance sheet and general 1. Which of the following is an asset on the consolidated balance sheet of the Federal Reserve Banks? A) loans to commercial banks B) Federal Reserve Notes in circulation C) Treasury deposits D) reserves of commercial banks 2. Reserves must be deposited in the Federal Reserve Banks by: A) only commercial banks which are members of the Federal Reserve System. B) all depository institutions, that is, all commercial banks and thrift institutions. C) state chartered commercial banks only. D) federally chartered commercial banks only. 3. The securities held as assets by the Federal Reserve Banks consist mainly of: A) corporate bonds. B) Treasury bills and Treasury bonds. C) common stock. D) certificates of deposit. 4. Federal Reserve Notes in circulation are: A) an asset as viewed by the Federal Reserve Banks. Page 1
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B) a liability as viewed by the Federal Reserve Banks. C) neither an asset nor a liability as viewed by the Federal Reserve Banks. D) part of M 1, but not of M 2 or M 3. 5. Which of the following will increase commercial bank reserves? A) the purchase of government bonds in the open market by the Federal Reserve Banks B) a decrease in the reserve ratio C) an increase in the discount rate D) the sale of government bonds in the open market by the Federal Reserve Banks 6. When a commercial bank borrows from a Federal Reserve Bank: A) the supply of money automatically increases. B) it indicates that the commercial bank is unsound financially. C) the commercial bank's lending ability is increased. D) the commercial bank's reserves are reduced. 7. The Federal Reserve Banks sell government securities to the public. As a result, the checkable deposits: A) of commercial banks are unchanged, but their reserves increase. B) and reserves of commercial banks both decrease. C) of commercial banks are unchanged, but their reserves decrease. D) of commercial banks are both unchanged. 8. The Federal Reserve Banks buy government securities from commercial banks. As a result, the checkable deposits: A) of commercial banks are unchanged, but their reserves increase. B) and reserves of commercial banks both decrease. C)
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This note was uploaded on 06/24/2008 for the course ECO 201/202 taught by Professor N/a during the Spring '08 term at VCCS.

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CH15 - CHAPTER 15 Monetary Policy Topic 1. 2. 3. 4. 5. 6....

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