ECN 211 Study Guide - Federal Funds Rate, Reserve Requirement, Fractional-Reserve Banking

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.

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.

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.

1913.

1929.

1865.

1941.

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.

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.

50 district banks.

24 district banks.

12 district banks.

7 district banks.

the Board of Governors.

the Federal Advisory Committee.

the Federal Open Market Committee.

the Federal Reserve district banks.

systemic risk.

liquidity risk.

lending risk.

moral hazard.

fiat money banking.

required reserve banking.

fractional reserve banking.

central banking system.

all customer deposits.

the minimum amount banks need to hold against time deposits.

federal reserve notes.

deposits held at the Fed and vault cash.

a cash flow statement.

an income statement.

a balance sheet.

a statement of net worth.

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.

$80.

$0.

$400.

$20.

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.

bank reserves will decrease.

the interest rate will rise.

the discount rate will rise.

the quantity of money will eventually increase.

borrowing money from the U.S. Treasury.

crediting the bank's checking account at the Fed.

decreasing the amount of money in circulation.

giving the bank gold.

$5,000

$2,000

$1,000

$500

Reserves would fall and deposits would fall by ten times the decrease in reserves.

Reserves would fall and maximum deposits would rise.

Reserves would stay the same, and maximum deposits would rise to $10,000.

Reserves would stay the same, and maximum deposits would fall to $100.