C appointed by the National Monetary Commission D appointed by the President of

C appointed by the national monetary commission d

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C) appointed by the National Monetary Commission. D) appointed by the President of the United States, subject to confirmation by the Senate. 21) How many Federal Reserve districts are there? A) 12 B) 2 C) 50 D) 1 22) A consol paying $20 annually when the interest rate is 5 percent has a price of A) $100. B) $200. C) $400. D) $800. 23)
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When secondary market buyers and sellers of securities meet in one central location to conduct trades the market is called a(n) A) over-the-counter market. B) barter market. C) exchange. D) common market. 24) Currently, a three-year Treasury note pays 4.75%. Assuming that your federal income tax rate is 20%, what is the minimum interest rate that you would you need to earn on a tax-free municipal bond in order to buy it instead? A) 3.8% B) 15.25% C) 0.95% D) 5.7% 25) If the federal government decreases its spending and doesn't decrease taxes, the bond supply shifts to the A) right and the equilibrium interest rate rises. B) right and the equilibrium interest rate falls. C) left and the equilibrium interest rate rises. D) left and the equilibrium interest rate falls. 26) Why didn't the surge in the monetary base between 2008-2012 lead to a similar surge in the money supply? A) Nonborrowed reserves declined, offsetting the increase in the monetary base. B) The excess reserve-deposit ratio rose significantly, resulting in a much smaller money multiplier. C) The currency-deposit ratio rose significantly, resulting in a much smaller money multiplier.
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D) The Fed increase the required reserve ratio, resulting in a much smaller money multiplier. 27) Suppose that a bank with no excess reserves receives a deposit into a checking account of $10,000 in currency. If the required reserve ratio is 0.20, what is the maximum amount that the bank can lend out? A) $8,000 B) $50,000 C) $2,000 D) $10,000 28) Under a fixed exchange rate regime, if a country has an overvalued exchange rate, then its central bank's attempt to keep its currency from ________ will result in a ________ of international reserves. A) depreciating; loss B) depreciating; gain C) appreciating; gain D) appreciating; loss 29) Everything else held constant, in the market for reserves, increases in the discount rate affect the federal funds rate A) when the funds rate is below the discount rate. B) when the demand for federal funds intersects the vertical section of the reserve supply curve. C) when the funds rate equals the discount rate. D) when the demand for federal funds equals zero. 30) The shadow banking system refers to
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A) pawn shops and institutions that offer payday loans. B) community banks. C) nonbank financial institutions such as investment banks and hedge funds. D) commercial banks. 31) The assumption of asymmetric information means that A) lenders know more than borrowers. B) borrowers know more than lenders. C) borrowers and lenders have perfect information. D) borrowers and lenders have the same information.
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  • Spring '13
  • Chikhladze
  • Monetary Policy, Federal Reserve System, federal funds rate

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