Question 1

Explain why the decision to join the Euro system presents serious domestic monetary policy issues.

Accepted Answer

To join the Euro system requires a count...

Question 2

The Treaty of Maastricht was signed in:

Accepted Answer

A)   1999.
B)   2001.
C)   1992.
D)   1997.E) All of the above
F) A) and C)

Question 3

Discuss whether a large private organization could function in the role of a lender of last resort, and if it could, what potential problem(s) might arise.

Accepted Answer

A private organization could function in...

Question 4

In its role as bank for the U.S. government, the Federal Reserve performs all of the following services, except:

Accepted Answer

A)   issuing new currency.
B)   making discount loans.
C)   maintaining the U.S. Treasury's bank account.
D)   managing U.S. Treasury borrowings.E) A) and C)
F) A) and B)

Question 5

Once the FOMC meetings adjourn, the public is made aware of the FOMC's decision:

Accepted Answer

A)   immediately after the meeting.
B)   forty-eight hours after the meeting adjourns.
C)   within five business days.
D)   twenty-four hours after the meeting adjourns.E) B) and C)
F) None of the above

Question 6

The Federal Open Market Committee began operating in:

Accepted Answer

A)   1913.
B)   1929.
C)   1914.
D)   1936.E) A) and D)
F) None of the above

Question 7

Which of the following is a false statement about the structure of the Federal Reserve System?

Accepted Answer

A)   Banker and business interests are reflected
B)   State and regional interests are reflected
C)   Government (public)  and private interests are reflected
D)   Exporter and importer interests are reflectedE) B) and C)
F) A) and C)

Question 8

The Federal Reserve banks play a role in formulating monetary policy by each of the following, except:

Accepted Answer

A)   conducting open market operations from their banks.
B)   participating in FOMC meetings.
C)   participation in setting the discount rate.
D)   making discount loans.E) B) and C)
F) A) and D)

Question 9

The lines drawn to establish Federal Reserve Districts were based on:

Accepted Answer

A)   solely population distribution in 1914.
B)   solely economic forces that existed in 1914.
C)   economic and political forces that existed in 1914.
D)   economic and political forces as well as population distribution in 1914.E) B) and C)
F) None of the above

Question 10

Comparing the European and the U.S. central bank systems, the Executive Board of the European system resembles:

Accepted Answer

A)   the FOMC.
B)   the Board of Governors.
C)   the Presidents of the regional Federal Reserve Banks.
D)   the Chairman of the Board of Governors of the Fed.E) B) and C)
F) A) and B)

Question 11

If it is the real rate of interest that savers and borrowers respond to, how does the Fed impact a real rate by targeting a nominal rate of interest?

Accepted Answer

Currently the Fed controls the federal f...

Question 12

The information contained in the Fed's Tealbook is released to the public:

Accepted Answer

A)   immediately after the FOMC meeting in which they are used.
B)   within two weeks after the FOMC meeting in which they are used.
C)   the material in the green book is never released to the public.
D)   five years after the FOMC meeting in which they are used.E) B) and C)
F) All of the above

Question 13

Prior to 1980:

Accepted Answer

A)   member banks of the Federal Reserve did not have to hold non-interest-bearing reserve deposits at the Fed.
B)   nonmember banks had to hold non-interest-bearing reserve deposits at the Fed.
C)   nonmember banks did not have to hold non-interest-bearing reserve deposits at the Fed.
D)   all banks, member or not, had to hold reserve deposits at the Fed in a non-interest-bearing account.E) B) and C)
F) B) and D)

Question 14

Which of the books used at the FOMC meetings can be characterized as less quantitative than the other two?

Accepted Answer

A)   The Tealbook
B)   The Beigebook
C)   The Greenbook
D)   The white paper released to the pressE) C) and D)
F) B) and C)

Question 15

In what ways do the regional Federal Reserve Banks influence monetary policy?

Accepted Answer

The regional banks influence monetary po...

Question 16

Which of the books used at the FOMC meetings contains a discussion of financial markets and current policy options?

Accepted Answer

A)   The Tealbook
B)   The Beigebook
C)   The Greenbook
D)   Both the Beigebook and GreenbooksE) B) and C)
F) A) and C)

Question 17

In terms of the decisions coming from the Euro system's Governing Council, explain why, at times, relatively small countries may be at a distinct disadvantage in terms of monetary policy targets but perhaps have undue influence in terms of the actual policies.

Accepted Answer

One example to show how the smaller coun...

Question 18

The Board of Governors of the Fed performs each of the following functions, except:

Accepted Answer

A)   analyzing financial and economic conditions.
B)   setting the reserve requirement.
C)   approving bank merger applications.
D)   making discount loans.E) C) and D)
F) None of the above

Question 19

Which of the books used at the FOMC meetings contain the Board staff's economic forecast for the next few years?

Accepted Answer

A)   The Bluebook
B)   The Beigebook
C)   The Tealbook
D)   Both the Beigebook and BluebookE) A) and B)
F) All of the above

Question 20

Once the FOMC announces the result of its meeting the attendees:

Accepted Answer

A)   it must brief the financial news immediately after and answer questions posed to them.
B)   observe a twenty-four hour blackout period following the meeting during which they do not speak publicly about the economic outlook or current monetary policy.
C)   observe a blackout period that lasts for a week following the meeting during which they do not speak publicly about the economic outlook or current monetary policy.
D)   never discuss the policy issues addressed in the meetings.E) A) and D)
F) B) and C)

Exam 16: The Structure of Central Banks: The Federal Reserve and the European Central Bank

In terms of the decisions coming from the Euro system's Governing Council, explain why, at times, relatively small countries may be at a distinct disadvantage in terms of monetary policy targets but perhaps have undue influence in terms of the actual policies.

Correct AnswerverifiedOne example to show how the smaller coun...View AnswerShow Answer

Prior to 1980:

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Once the FOMC announces the result of its meeting the attendees:

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The Federal Reserve banks play a role in formulating monetary policy by each of the following, except:

Correct AnswerverifiedShow Answer

Which of the books used at the FOMC meetings contain the Board staff's economic forecast for the next few years?

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The Board of Governors of the Fed performs each of the following functions, except:

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Which of the following is a false statement about the structure of the Federal Reserve System?

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Which of the books used at the FOMC meetings contains a discussion of financial markets and current policy options?

Correct AnswerverifiedShow Answer

In what ways do the regional Federal Reserve Banks influence monetary policy?

Correct AnswerverifiedThe regional banks influence monetary po...View AnswerShow Answer

Explain why the decision to join the Euro system presents serious domestic monetary policy issues.

Correct AnswerverifiedTo join the Euro system requires a count...View AnswerShow Answer

Which of the books used at the FOMC meetings can be characterized as less quantitative than the other two?

Correct AnswerverifiedShow Answer

Discuss whether a large private organization could function in the role of a lender of last resort, and if it could, what potential problem(s) might arise.

Correct AnswerverifiedA private organization could function in...View AnswerShow Answer

In its role as bank for the U.S. government, the Federal Reserve performs all of the following services, except:

Correct AnswerverifiedShow Answer

The Treaty of Maastricht was signed in:

Correct AnswerverifiedShow Answer

Comparing the European and the U.S. central bank systems, the Executive Board of the European system resembles:

Correct AnswerverifiedShow Answer

The Federal Open Market Committee began operating in:

Correct AnswerverifiedShow Answer

The information contained in the Fed's Tealbook is released to the public:

Correct AnswerverifiedShow Answer

If it is the real rate of interest that savers and borrowers respond to, how does the Fed impact a real rate by targeting a nominal rate of interest?

Correct AnswerverifiedCurrently the Fed controls the federal f...View AnswerShow Answer

The lines drawn to establish Federal Reserve Districts were based on:

Correct AnswerverifiedShow Answer

Once the FOMC meetings adjourn, the public is made aware of the FOMC's decision:

Correct AnswerverifiedShow Answer

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One example to show how the smaller coun...
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The regional banks influence monetary po...
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To join the Euro system requires a count...
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Correct Answer
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Correct Answer
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A private organization could function in...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Currently the Fed controls the federal f...
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Correct Answer
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Correct Answer
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