In the U.S. economy, the money supply is controlled by the:
A. Congress.
B. Federal Reserve System.
C. Senate Committee on Banking and Finance.
D. US treasury.
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Related questions
QUESTION 31
The Board of Governors of the Federal Reserve System is
| composed of seven members who are appointed by the President and approved by the Senate. | ||
| composed of 12 members of the Senate and the U.S. House of Representatives. | ||
| elected by the general public. | ||
| composed of representatives from the country's 12 largest commercial banks. |
1.11 points
QUESTION 32
The Fed is said to be the "lender of last resort" in that
| it charges a higher interest rate to borrowers than does any other bank. | ||
| it functions as the government's bank only when commercial banks fail to do so. | ||
| it makes loans to individuals whom commercial banks do not believe are credit-worthy. | ||
| it stands ready to lend to any depository institution that it has decided should not fail. |
1.11 points
QUESTION 33
The Federal Reserve System acts as the government's fiscal agent by
| providing checking account services for the government. | ||
| preparing the budget the President presents to Congress every year. | ||
| determining how to finance a deficit. | ||
| auditing taxpayers. |
1.11 points
QUESTION 34
The Federal Reserve System was established in which year?
| 1913. | ||
| 1929. | ||
| 1865. | ||
| 1941. |
1.11 points
QUESTION 35
By serving as the lender of last resort,
| the Fed provides check clearing services. | ||
| the Fed aids in the sale of government securities. | ||
| the Fed supervises depository institutions. | ||
| the Fed can prevent bank failures. |
1.11 points
QUESTION 36
Depository institutions must
| use and pay for the services of the Federal Reserve System. | ||
| set their interest rates according to schedules established by the Federal Reserve System. | ||
| keep a certain percentage of their deposits as reserves. | ||
| turn over a percentage of their profits to the Federal Reserve System as payment for services provided by the Fed. |
1.11 points
QUESTION 37
The Federal Reserve System has
| 50 district banks. | ||
| 24 district banks. | ||
| 12 district banks. | ||
| 7 district banks. |
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QUESTION 38
The part of the Federal Reserve System (the Fed) that holds the reserve balances of depository institutions is
| the Board of Governors. | ||
| the Federal Advisory Committee. | ||
| the Federal Open Market Committee. | ||
| the Federal Reserve district banks. |
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QUESTION 39
The potential for a financial breakdown at one financial institution to spread throughout the financial system is known as a
| systemic risk. | ||
| liquidity risk. | ||
| lending risk. | ||
| moral hazard. |
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QUESTION 40
A system in which depository institutions hold reserves that are less than the amount of total deposits is called
| fiat money banking. | ||
| required reserve banking. | ||
| fractional reserve banking. | ||
| central banking system. |
1.11 points
QUESTION 41
Total reserves of private banks are
| all customer deposits. | ||
| the minimum amount banks need to hold against time deposits. | ||
| federal reserve notes. | ||
| deposits held at the Fed and vault cash. |
1.11 points
QUESTION 42
A statement of assets and liabilities of any business entity is called
| a cash flow statement. | ||
| an income statement. | ||
| a balance sheet. | ||
| a statement of net worth. |
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QUESTION 43
Which of the following actions has no effect on the total money supply?
| The Federal Open Market Committee buys government securities. | ||
| There is a transfer of deposits from one bank to another bank. | ||
| There is change in the money multiplier. | ||
| The Federal Open Market Committee sells government securities. |
1.11 points
QUESTION 44
Given a required reserve ratio of 20 percent, a commercial bank that has received a new deposit of $100 can make additional loans of
| $80. | ||
| $0. | ||
| $400. | ||
| $20. |
1.11 points
QUESTION 45
The Federal Open Market Committee has responsibility for
| appointing members to the Board of Governors of the Federal Reserve system. | ||
| issuing orders to buy or sell government securities for the Fed. | ||
| advising the Treasury Department on monetary policy. | ||
| printing money. |
