Question 1

Debt management includes all of the following except:

Accepted Answer

A)  the types of securities to sell
B)  the interest rate patterns to use
C)  the types of refunding to carry out
D)  all of the aboveE) None of the above
F) B) and D)

Question 2

During the 2007 - 2009 financial crisis,many major financial institutions and business corporations were on the verge of collapse or failure;however,some of the very largest corporations and financial institutions were deemed as being ________ because their failure would cause cascading negative repercussions throughout the U.S.and many foreign economies.

Accepted Answer

A)  toxic firms
B)  boat rockers.
C)  too large to ignore
D)  too big to fail
E)  none of the aboveF) A) and E)
G) A) and C)

Question 3

A country's economic policy actions are directed toward all of the following goals EXCEPT:

Accepted Answer

A)  balance in the federal budget
B)  high employment
C)  price stability
D)  all of the above are primary policy goalsE) B) and C)
F) A) and B)

Question 4

Federal Reserve open market operations,setting reserve requirement,and lending to depositories are:

Accepted Answer

A)  usually conducted simultaneously
B)  all designed to have their effect by influencing the reserves of depository institutions
C)  of equal importance in their effort
D)  functions shared with the U.S.TreasuryE) B) and D)
F) None of the above

Question 5

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Accepted Answer

A) True 
 B)False

Question 6

During the 2007 - 2009 financial crisis,some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S.and many foreign economies.As a result,the Federal Reserve

Accepted Answer

A)  moved to reduce liquidity in the monetary system and increased its target federal funds rate to above .25 percent.
B)  worked with the U.S.Treasury to help facilitate the separation of financially weak institutions with institutions that were financially stronger.
C)  both a and b are true
D)  none of the above are trueE) A) and B)
F) B) and D)

Question 7

Open market operations differ from discounting operations in that they are:

Accepted Answer

A)  initiated by member depository institutions
B)  designed to be of significance only to large city banks
C)  initiated by the Federal Reserve
D)  initiated by the U.S.TreasuryE) None of the above
F) A) and B)

Question 8

The multiplying capacity of primary deposits is reduced if:

Accepted Answer

A)  no additional cash is withdrawn for hand-to-hand circulation
B)  businesses increase their petty cash funds in U.S.banks
C)  foreign countries deposit funds in U.S.banks
D)  the U.S.Treasury deposits fundsE) A) and B)
F) C) and D)

Question 9

Continuing federal programs that stabilize economic activity are called

Accepted Answer

A)  transfer payments
B)  leveling programs
C)  social insurance programs
D)  socialist spending
E)  none of the aboveF) C) and D)
G) B) and E)

Question 10

During the 2007 - 2009 financial crisis,___________ and __________,who were major participants in the secondary mortgage markets,were on the verge of financial insolvency and possible collapse in mid-2008.

Accepted Answer

A)  Fannie Mae and Freddie Mac
B)  the Federal Treasury and the Federal Reserve
C)  Morgan Stanley and Smith Barney
D)  Washington Mutual and Lehman Brothers
E)  none of the aboveF) A) and C)
G) A) and D)

Question 11

The branch of government primarily responsible for the formulation of fiscal policy is the U.S.Senate.

Accepted Answer

A) True 
 B)False

Question 12

When a customer demands additional currency and cashes a check for $500,all of the following occur except:

Accepted Answer

A)  the deposits of the bank are reduced $500
B)  required reserves are reduced
C)  Federal Reserves notes decrease
D)  additional reserves must be acquired if the bank has no excess reservesE) None of the above
F) All of the above

Question 13

Price inflation:

Accepted Answer

A)  is relatively unimportant to individuals
B)  is considered to be acceptable in the nation's quest for high levels of employment
C)  levels the playing field and encourages investment by reducing the uncertainty about future returns
D)  is almost always due to financing wars
E)  none of the aboveF) A) and C)
G) B) and C)

Question 14

The U.S.Treasury has little power to influence money markets.

Accepted Answer

A) True 
 B)False

Question 15

Although the Treasury has vast power to affect the supply of money and credit,the Treasury largely limits its actions to taxing,borrowing,paying bills,and refunding maturing obligations.

Accepted Answer

A) True 
 B)False

Question 16

Who made the following famous statement: "The government's view of the economy could be summed up in a few short phrases: If it moves,tax it.If it keeps moving,regulate it.And if it stops moving,subsidize it."

Accepted Answer

A)  Alan Greenspan
B)  Ronald Reagan
C)  Jimmy Carter
D)  George Herbert Walker Bush
E)  none of the aboveF) A) and B)
G) C) and E)

Question 17

The basic function served by requiring adequate bank reserves in the monetary system is to:

Accepted Answer

A)  assure bank liquidity
B)  provide the basis for the regulation of credit expansion and contraction
C)  maintain adequate capital for investors
D)  impose a burden of risk on bank stockholders
E)   none of the above F) C) and E)
G) B) and E)

Question 18

In fall 2008,the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

Accepted Answer

A)  Economic Stimulus Act
B)  Economic Recovery Act
C)  Economic Stabilization Act
D)  Economic Booster Act
E)  none of the aboveF) All of the above
G) A) and C)

Question 19

A budget deficit stimulates economic activity.

Accepted Answer

A) True 
 B)False

Question 20

Banking system reserves plus currency held by the nonbank public is referred to as the:

Accepted Answer

A)  money supply
B)  monetary base
C)  monetary multiplier
D)  monetary requirementE) All of the above
F) A) and D)

Exam 5: Policy Makers and the Money Supply

Correct Answer
verified

Banking system reserves plus currency held by the nonbank public is referred to as the:

Correct Answer
verified

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Correct Answer
verified

Continuing federal programs that stabilize economic activity are called

Correct Answer
verified

The branch of government primarily responsible for the formulation of fiscal policy is the U.S.Senate.

Correct Answer
verified

When a customer demands additional currency and cashes a check for $500,all of the following occur except:

Correct Answer
verified

During the 2007 - 2009 financial crisis,some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S.and many foreign economies.As a result,the Federal Reserve

Correct Answer
verified

Federal Reserve open market operations,setting reserve requirement,and lending to depositories are:

Correct Answer
verified

A budget deficit stimulates economic activity.

Correct Answer
verified

Price inflation:

Correct Answer
verified

The multiplying capacity of primary deposits is reduced if:

Correct Answer
verified

The U.S.Treasury has little power to influence money markets.

Correct Answer
verified

During the 2007 - 2009 financial crisis,_ and ,who were major participants in the secondary mortgage markets,were on the verge of financial insolvency and possible collapse in mid-2008.

Correct Answer
verified

Who made the following famous statement: "The government's view of the economy could be summed up in a few short phrases: If it moves,tax it.If it keeps moving,regulate it.And if it stops moving,subsidize it."

Correct Answer
verified

A country's economic policy actions are directed toward all of the following goals EXCEPT:

Correct Answer
verified

Although the Treasury has vast power to affect the supply of money and credit,the Treasury largely limits its actions to taxing,borrowing,paying bills,and refunding maturing obligations.

Correct Answer
verified

In fall 2008,the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

Correct Answer
verified

The basic function served by requiring adequate bank reserves in the monetary system is to:

Correct Answer
verified

Open market operations differ from discounting operations in that they are:

Correct Answer
verified

Debt management includes all of the following except:

Correct Answer
verified

Exam 5: Policy Makers and the Money Supply

Correct AnswerverifiedShow Answer

Banking system reserves plus currency held by the nonbank public is referred to as the:

Correct AnswerverifiedShow Answer

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Correct AnswerverifiedShow Answer

Continuing federal programs that stabilize economic activity are called

Correct AnswerverifiedShow Answer

The branch of government primarily responsible for the formulation of fiscal policy is the U.S.Senate.

Correct AnswerverifiedShow Answer

When a customer demands additional currency and cashes a check for $500,all of the following occur except:

Correct AnswerverifiedShow Answer

During the 2007 - 2009 financial crisis,some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S.and many foreign economies.As a result,the Federal Reserve

Correct AnswerverifiedShow Answer

Federal Reserve open market operations,setting reserve requirement,and lending to depositories are:

Correct AnswerverifiedShow Answer

A budget deficit stimulates economic activity.

Correct AnswerverifiedShow Answer

Price inflation:

Correct AnswerverifiedShow Answer

The multiplying capacity of primary deposits is reduced if:

Correct AnswerverifiedShow Answer

The U.S.Treasury has little power to influence money markets.

Correct AnswerverifiedShow Answer

During the 2007 - 2009 financial crisis,___________ and __________,who were major participants in the secondary mortgage markets,were on the verge of financial insolvency and possible collapse in mid-2008.

Correct AnswerverifiedShow Answer

Who made the following famous statement: "The government's view of the economy could be summed up in a few short phrases: If it moves,tax it.If it keeps moving,regulate it.And if it stops moving,subsidize it."

Correct AnswerverifiedShow Answer

A country's economic policy actions are directed toward all of the following goals EXCEPT:

Correct AnswerverifiedShow Answer

Although the Treasury has vast power to affect the supply of money and credit,the Treasury largely limits its actions to taxing,borrowing,paying bills,and refunding maturing obligations.

Correct AnswerverifiedShow Answer

In fall 2008,the U.S.Congress and President George W.Bush responded to the financial crisis with the passage of the _____________ in early October of that year.

Correct AnswerverifiedShow Answer

The basic function served by requiring adequate bank reserves in the monetary system is to:

Correct AnswerverifiedShow Answer

Open market operations differ from discounting operations in that they are:

Correct AnswerverifiedShow Answer

Debt management includes all of the following except:

Correct AnswerverifiedShow Answer

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During the 2007 - 2009 financial crisis,_ and ,who were major participants in the secondary mortgage markets,were on the verge of financial insolvency and possible collapse in mid-2008.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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