CHAP017 - Chapter 17 The Central Bank Balance Sheet and the...

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Chapter 17 The Central Bank Balance Sheet and the Money Supply Process Multiple Choice Questions 1. The collapse of the Thai currency, the baht, was partially due to: A) Inaction by the Federal Reserve. B) The European Central Bank. C) Information provided by the central bank of Thailand. D) Information not provided by the central bank of Thailand. Answer: D LOD: 1 Page: 427 A-Head: The Central Bank's Balance Sheet. 2. Each of the following items would appear as assets on the central bank's balance sheet, EXCEPT: A) Loans B) Securities C) Currency D) Foreign Exchange Reserves. Answer: C LOD: 1 Page: 428 A-Head: The Central Bank's Balance Sheet. 3. A central Bank's balance sheet will categorize the following as liabilities: A) Currency B) Loans C) Securities D) Foreign Exchange Reserves E) a and c Answer: A LOD: 1 Page: 428 A-Head: The Central Bank's Balance Sheet. 4. A central bank's balance sheet would categorize each of the following as liabilities, EXCEPT: A) Currency B) Loans C) Securities D) Accounts of the Commercial Banks Answer: B LOD: 1 Page: 428 A-Head: The Central Bank's Balance Sheet. Cecchetti: Money, Banking, and Financial Markets 499
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Chapter 17 The Central Bank Balance Sheet and the Money Supply Process 5. The main asset held by a central bank in its role as the Banker's Bank is: A) Foreign Exchange Reserves B) Currency C) Loans D) Securities Answer: C LOD: 1 Page: 428 A-Head: The Central Bank's Balance Sheet. 6. A liability of the central bank in functioning as the Banker' Bank is: A) Accounts of commercial banks B) Securities C) Loans D) Currency Answer: A LOD: 1 Page: 428 A-Head: The Central Bank's Balance Sheet. 7. For the Federal Reserve's balance sheet, the asset listed Securities would include: A) Private and public debt. B) Mainly U.S. Treasury and municipal bonds. C) Bonds issued by commercial banks. D) Only U.S. Treasury securities and small quantities of Federal Agency Obligations. Answer: D LOD: 2 Page: 428 A-Head: The Central Bank's Balance Sheet. 8. If the Federal Reserve is to be independent, the quantity of securities it purchases is determined by: A) The Federal Reserve itself. B) Congress. C) The amount the public does not want to purchase at the going price. D) The Treasury. Answer: A LOD: 2 Page: 428 A-Head: The Central Bank's Balance Sheet. 500 Cecchetti: Money, Banking, and Financial Markets
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Chapter 17 The Central Bank Balance Sheet and the Money Supply Process 9. A central bank holds foreign exchange reserves primarily for: A) Diversification purposes. B) Foreign exchange market interventions. C) Safekeeping. D) All of the above. Answer: B LOD: 2 Page: 428 A-Head: The Central Bank's Balance Sheet. 10. The quantity of securities held by the Federal Reserve is controlled by: A) The U.S. Treasury. B) The Fed's annual budget.
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This note was uploaded on 02/12/2012 for the course ECON 101 taught by Professor Abrams during the Spring '11 term at Adams State University.

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CHAP017 - Chapter 17 The Central Bank Balance Sheet and the...

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