San Francisco since it serves almost one-third of the country. New York City. Kansas City. Question 21 1.25 / 1.25 pts A central bank holds foreign exchange reserves for: diversification purposes. foreign exchange interventions.
safekeeping. diversification and safekeeping. Question 22 1.25 / 1.25 pts Each of the following items would appear as assets on the central bank's balance sheet, except: currency. loans. securities. foreign exchange reserves. Question 23 1.25 / 1.25 pts The collapse of the Thai currency, the baht, was partially due to: inaction by the Federal Reserve.
the European Central Bank. information provided by the central bank of Thailand. information not provided by the central bank of Thailand. Question 24 1.25 / 1.25 pts When an individual withdraws funds from a checking account the: bank's balance sheet shrinks but the size of the Fed's balance sheet is not affected. bank's balance sheet shrinks and so does the Fed's balance sheet. bank's balance sheet shrinks but the size of the Fed's balance sheet increases. size of the bank's balance sheet stays the same but the size of the Fed's balance sheet shrinks. Question 25 1.25 / 1.25 pts To obtain a discount loan from the Fed, a commercial bank must:
provide collateral. prove that it will fail if it does not obtain the loan. agree to more frequent examinations. prove that the loan will be used to make loans. Question 26 1.25 / 1.25 pts The quantity of securities held by the Federal Reserve is controlled through: the U.S. Treasury. the Fed's annual budget. open market operations. the purchases made by the regional Reserve banks.
Question 27 1.25 / 1.25 pts A central bank's balance sheet will categorize the following as liabilities: currency. loans. securities. foreign exchange reserves. Question 28 1.25 / 1.25 pts If the Federal Reserve is to be independent, then the quantity of securities it purchases is determined by: the Federal Reserve itself. Congress. the amount the public does not want to purchase at the going price.
the Treasury. Question 29 1.25 / 1.25 pts The main asset held by a central bank in its role as the bankers’ bank is: foreign exchange reserves. currency. loans. securities. Question 30 1.25 / 1.25 pts An open market sale of U.S. Treasury securities by the Fed will cause the Fed's balance sheet to show: a decrease in the asset of securities and a decrease in the liability of reserves. an increase in the liability of reserves.
no change in the size of the balance sheet, just the composition of assets will change from securities to cash. an increase in the asset category of securities and the liability category of reserves. Question 31 1.25 / 1.25 pts Which of the following statements is most correct? The Fed can control the amount of reserves, but cannot control the monetary base. The Fed can control the make-up of the monetary base, but cannot affect the market interest rate. The Fed can control the size of the monetary base but not the price of its components.