FIN 322 Final Exam | Answered with complete solutions
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Course
FIN 322
Institution
FIN 322
FIN 322 Final Exam | Answered with complete solutions The ____ is directly responsible for setting reserve requirements. a. Federal Advisory Council b. FOMC c. Board of Governors d. President of the United States When the Fed initiated a program to purchase commercial paper, one of its primary go...
The ____ is directly responsible for setting reserve requirements.
a.
Federal Advisory Council
b.
FOMC
c.
Board of Governors
d.
President of the United States
When the Fed initiated a program to purchase commercial paper, one of its primary
goals was to
a.
prevent financial institutions from holding commercial paper.
b.
require that financial institutions increase their holdings of commercial paper.
c.
increase activity in the market for commercial paper and boost the confidence of
investors in commercial paper.
d.
prevent financial institutions from issuing commercial paper in the future.
When the Fed buys Treasury bills as a means of increasing the money supply, it places
____ pressure on their prices and ____ pressure on their yields.
a.
upward; upward
b.
downward; downward
c.
upward; downward
,d.
downward; upward
The ________ the reserve requirement ratio, the _______ the ultimate effect of any
initial increase in the money supply.
a.
lower; less
b.
lower; greater
c.
greater; less
d.
lower; greater AND greater; less
As a result of the Financial Reform Act of 2010, the ______ was established to regulate
financial products and services.
a.
Federal Advisory Committee
b.
Federal Open Market Committee
c.
Consumer Financial Protection Bureau
d.
Board of Governors
As the supply of funds in the banking system ____, the federal funds rate ____.
a.
increases; declines
b.
increases; increases
c.
declines, declines
d.
None of these are correct.
,When the Fed purchases _______, it is attempting to directly stimulate the housing
market.
a.
commercial paper
b.
short-term Treasury securities
c.
mortgage-backed securities
d.
consumer loans
With regard to monetary policy, which of the following is under the direct control of the
Federal Reserve's Board of Governors?
a.
revising reserve requirements for depository institutions
b.
authorizing changes in the amount of borrowing by the Treasury
c.
monitoring the stock market for insider trading
d.
monitoring the derivatives market for illegal trading strategies
Which of the following is NOT a major component of the Federal Reserve System?
a.
member banks
b.
Federal Open Market Committee
c.
Securities and Exchange Commission
d.
Board of Governors
Which of the following is currently a main role of the Federal Reserve's Board of
Governors?
, a.
regulating commercial banks
b.
regulating foreign trade
c.
controlling monetary policy
d.
regulating commercial banks AND controlling monetary policy
To decrease the money supply, the Fed could _______ the reserve requirement ratio.
a.
increase
b.
stabilize
c.
reduce
d.
eliminate
The term "quantitative easing" refers to the Fed's
a.
purchases of only short-term Treasury securities.
b.
sales of only short-term Treasury securities.
c.
purchases of various types of debt securities, including risky debt securities.
d.
purchases of only commodities such as gold.
When the Fed sells securities, the total funds of commercial banks ______ by the
market value of the securities sold by the Fed. This activity initiated by the FOMC's
policy directive is referred to as a ______ of money supply growth.
a.
increase; loosening
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