Chapter 03 MC - CHAPTER THREE Multiple Choice Questions...

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CHAPTER THREE Multiple Choice Questions 3-1. The economy is experiencing a severe recession. The Fed will most likely: a. lower reserves at commercial banks b. buy Treasury securities c. increase the discount rate d. increase the reserve requirement 3-2. The economy is experiencing strong economic growth. The Fed will most likely: a. sell Treasury securities b. buy Treasury securities c. decrease the discount rate d. decrease the Fed funds rate 3-3. National commercial banks are examined primarily by: a. the Comptroller of the Currency b. the FDIC c. the Federal Reserve d. The state banking authorities 3-4. Commercial banks that are state member banks are examined primarily by: a. the Comptroller of the Currency b. the FDIC c. the Federal Reserve d. The state banking authorities 3-5. State nonmember insured commercial banks are examined primarily by: a. the Comptroller of the Currency b. the FDIC c. the Federal Reserve d. The state banking authorities 3-6. Primary Reserves: a. include marketable securities b. include vault cash and deposits held at the Federal Reserve c. provide all the liquidity for commercial banks d. include only Treasury securities 3-7. An S&L with a portfolio of mortgages has a positive interest-rate spread and interest rates are rising: 22
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a. the net profit margin will fall b. c. there will be no net effect on profits d. the net interest margin will rise 3-8. A bank needs ______ before it opens for business a. a charter b. permission from the President c. permission from the Chairman of the Federal Reserve d. permission from its regional Federal Reserve Bank 3-9. Open market operations:
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Chapter 03 MC - CHAPTER THREE Multiple Choice Questions...

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