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Who is the current Chairman of the Federal Reserve? What is he doing to boost the financial market and the economy? Can he help revive the housing market? Did the REFI (Mortgage Refinancing) Boom help the economic recovery? Let's find out what the Federal Reserve (Fed) is all about. What is FOMC doing? What is the current Federal Funds Rate? How does the Fed implement monetary policy to manage the economy? Is the Fed currently using Expansionary Monetary Policy? Why?

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Darryn D'Souza
Darryn D'SouzaLv10
28 Sep 2019

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Related questions

Each Federal Reserve Bank is

Answer

a corporation.

a government owned enterprise.

a government subsidized entity.

a government-sponsored enterprise.

A transaction in which the Fed agrees to buy a security one day and sell it back the next day is

Answer

an overnight securitization operation.

a repurchase agreement.

a legal tender.

a rebate sale.

The Federal Reserve document that states the goals of the FOMC and the target for the federal funds rate is known as the

Answer

Directive.

Beige

book.

Bluebook.

Green book.

How long is the normal term in office for a Governor of the Federal Reserve Board?

Answer

Five years

Seven years

Fourteen years

Life

The federal funds rate is the interest rate on

Answer

loans to banks from the Fed.

loans by banks to the Fed.

short-term loans between banks.

Treasury bills.

Expenditures of each Federal Reserve Bank are approved by

Answer

the U.S. Senate.

the President of the United States.

the U.S. Treasury Department.

the Federal Reserve Board of Governors.

Federal Reserve Banks pay for their central banking operations through

Answer

government tax revenue.

interest on the securities they own.

fees charged to banks that use their services.

dividends paid by local banks.

When the Fed engages in open-market operations, the transactions are conducted by

Answer

the Open Market Desk at the Federal Reserve Bank of New York.

the Open Market Desk at the Federal Reserve Board in Washington, D.C.

the National Bureau of Economic Research.

the Federal Open Market Committee.

In 2006, Chairman Greenspan left the Fed because

Answer

President Bush wanted him to resign.

he reached mandatory retirement age.

his term as Governor expired.

his term as Chairman expired.

The Federal Reserve publication that discusses forecasts for the economy is known as the

Answer

Redbook.

Beigebook.

Bluebook.

Greenbook.

The FOMC directive

Answer

describes forecasts for the economy.

states the target for the federal funds rate.

discusses the regional economies around the country.

shows the Fed's balance sheet.

The chairman of the Federal Reserve Board who reduced the inflation rate from over 10 percent to about 3 percent in the early 1980s was

Answer

Arthur Burns.

G. William Miller.

Paul Volcker.

Alan Greenspan.

Which Fed chairman ensured the independence of the Federal Reserve in the 1950s?

Answer

William McChesney Martin

Arthur Burns

Paul Volcker

G. William Miller

There are ____ Federal Reserve Banks.

Answer

seven

ten

twelve

fifteen

Purchases and sales of government securities in the secondary market are known as

Answer

discount borrowing and lending.

federal funds purchases and sales.

discounting.

open-market operations.

The monetary base can be divided into

Answer

currency plus transactions deposits.

vault cash plus reserves held at the Fed.

required clearing balances plus currency.

reserves plus currency.

The Fed does not generally change reserve requirements to affect the money supply because

Answer

the impact is too large.

the Fed needs the approval of Congress to do so.

it's not legal for the Fed to do so.

the Fed needs the approval of the President of the United States to do so.

The Fed has decided to tighten monetary policy, so it decreases the money supply through

Answer

defensive open-market operations.

dynamic open-market operations.

reduced discount loans for profit.

reduced discount loans for business needs.

A haircut is

Answer

the extra collateral the Fed requires above the value of a discount loan.

the extra principal a commercial bank requires the Fed to pay when making a discount loan.

the difference between what an investor pays for a bond and what the investor sells the bond for.

expected personal grooming for a member of the Board of Governors.

Currency held by the nonbank public plus banks' vault cash plus banks' deposits at the Fed equals

Answer

the Fed's capital stock.

discount loans.

the monetary base.

required clearing balances.

The extra collateral the Fed requires above the value of a discount loan is known as

Answer

the term premium.

a haircut.

a covenant.

secondary credit.

Currency held by the nonbank public plus banks' reserves equals

Answer

the Fed's capital stock.

discount loans.

the monetary base.

required clearing balances.

The money supply divided by the monetary base equals

Answer

the reserve ratio.

velocity.

high-powered money.

the money multiplier.

The main liability on the Federal Reserve's balance sheet is

Answer

discount loans.

securities.

monetary base.

capital.

A bank in good condition may take out a loan without the Fed questioning the purpose or nature of the loan. Such a loan is known as

Answer

a no documentation discount loan.

a haircut.

a covenant.

a primary credit discount loan.

If the Open-Market Desk at the Fed buys securities when the federal funds rate is below the primary credit discount rate, the most likely effect is that the

Answer

federal funds rate decreases.

primary credit discount rate decreases.

primary credit discount rate increases.

federal funds rate increases.

In November and December, people use more currency than usual, so the Fed increases the money supply through

Answer

defensive open-market operations.

dynamic open-market operations.

discount loans for profit.

discount loans for business needs.

Reserves held by banks at the Fed that earn implicit interest payments in the form of earnings credits for Fed services are known as

Answer

required clearing balances.

reserve requirements.

excess reserves.

non-transaction deposits.

Required clearing balances

Answer

pay interest in the form of earnings credits.

count as reserves and can be used to meet reserve requirements.

pay interest equal to the federal funds rate minus one percent.

are required to be held against transactions deposits.

  • What are the requirements for something to be considered money? Why does the dollar have value?
  • What does the money supply consist of and what are the respective amounts in the total money supply for the United States?
  • What are the primary functions of the Fed? What role does the Federal Open Market Committee (FOMC) play in our economy?
  • What role do the financial institutions (commercial banks and other institutions) play in our financial system?
  • What is meant by the term “fractional-reserve banking” in our system? What are the implications for consumers?
  • What are the tools available to the FED for controlling the money supply? Which are used most often? Which are most effective?
  • How does the money multiplier help to determine the effects of monetary policy?
  • What are the pros and cons of using monetary policy, as opposed to the use of fiscal policy, for implementing economic policies and practices?
  • What are the requirements for something to be considered money? Why does the dollar have value?
  • What does the money supply consist of and what are the respective amounts in the total money supply for the United States?
  • What are the primary functions of the Fed? What role does the Federal Open Market Committee (FOMC) play in our economy?
  • What role do the financial institutions (commercial banks and other institutions) play in our financial system?
  • What is meant by the term “fractional-reserve banking” in our system? What are the implications for consumers?
  • What are the tools available to the FED for controlling the money supply? Which are used most often? Which are most effective?
  • How does the money multiplier help to determine the effects of monetary policy?
  • What are the pros and cons of using monetary policy, as opposed to the use of fiscal policy, for implementing economic policies and practices?

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