Is the number of deposit dollars the banking system can create from $1 of excess reserves. Keynesians believe a change in the money supply cannot lower the unemployment rate. According to the monetarist view, the aggregate supply curve is: Vertical at the natural rate of unemployment. Economics Q&A Library Who selects the chairperson of the federal reserve system ? a. Given Keynesian assumptions about the shape of the aggregate supply curve and an economy suffering a recession, which of the following is most likely to occur if the Fed pursues expansionary monetary policy? (b) 31. If the Fed buys more bonds from the public, then the money supply will: Reduce the reserve requirement, reduce the discount rate, or buy bonds. ... and the Commonwealth of the Northern Mariana Islands. Members of the Federal Reserve Board of Governors are appointed for one fourteen-year term so that they: A. One News Wire article in the text has the title "Fed Cuts Key Interest Rate Half-Point to 1 Percent." The Federal Reserve System will set the interest rate charged to financial institutions to borrow money. Congress and the president are the key decision makers for U.S. monetary policy. The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. To ensure the best experience, please update your browser. Checks are cleared between private banks by: The 12 regional Fed banks do all of the following except: Make their decisions based on economic, rather than political, considerations. When the Fed sells bonds in the open market, interest rates _______ and aggregate demand shifts to the _______. c) every president of a Federal Reserve District Bank will serve at least 14 years on the board of governors. Board of Governors Members, 1914-Present. The Board of Governors has 12 members who serve 7-year terms. The first Federal Reserve Board was officially sworn in on August 10, 1914. Cause inflation if the economy is at full employment. The money multiplier and excess reserves. Using aggregate supply and demand curves drawn according to the Keynesian view, which of the following will occur if the Fed buys bonds in the open market and the economy is below full employment? Profit-maximizing banks try to keep their excess reserves as high as possible. Correct Answer: the Federal Reserve Board of Governors. The Board of Governors guides the operation of the Federal Reserve System to promote the goals and fulfill the responsibilities given to the Federal Reserve by the Federal Reserve Act. If the Fed wants to stimulate aggregate demand it should _____ bonds to _____ the money supply. The chairman of the Federal Reserve Board of Governors: A. The president of each regional Federal Reserve Bank is appointed by, 16. The Board of Governors, also known as the Federal Reserve Board, is the national component of the Federal Reserve System. is the rate of interest charged by the Fed when it lends money to private banks. b. Selling bonds and increasing the discount rate. The use of money and credit controls to change macroeconomic activity is known as: Monetary policy involves the use of money and credit controls to: Federal Reserve System's control over the money supply. Which of the following will cause a decrease in aggregate demand? A decrease in the reserve requirement will cause a decrease in the money multiplier. The Federal Reserve System (also known as the Federal Reserve or simply the Fed) is the central banking system of the United States of America.It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system in order to alleviate financial crises. If the Fed wishes to decrease the money supply it can: The policy lever most commonly used by the Fed is: A. Changes in the discount rate. The 12 regional Federal Reserve Banks. The Federal Reserve districts and the cities where their regional headquarters are located are shown in Figure 2. Which of the following statements about the Federal Reserve is not correct? At the core of the Federal Reserve System is the Board of Governors, or Federal Reserve Board. The nine governors select the Postmaster General, who becomes a member of the Board, and those 10 select the Deputy Postmaster General, who also serves on the Board. The Federal Reserve is more than the Board of Governors. The Fed has most likely reduced the: If a private bank lends money to another bank, the interest rate that is charged for the loan is the: How many members are there of the U.S. Senate Committee on Banking, Housing and Urban Affairs? The Board of Governors--located in Washington, D.C.--is the governing body of the Federal Reserve System. The Board of Governors, located in Washington, D.C., provides the leadership for the System. Those principles are as follows: 32. Which of the following approaches should the Fed use if it experiences large lags and mistakes in monetary policy? The Board of Governors consists of seven members elected by the public every four years. D. Have enough time to travel to all 12 regional banks. A. At any meeting of the Federal Open Market Committee, that committee's voting members consist of. Which of the following will cause an increase in aggregate demand? The Board of Governors of the Federal Reserve System is the key decision maker for monetary policy. Which of the following best describes the eclectic aggregate supply curve? 18. Which of the following is not correct? 7. Decrease and the aggregate demand curve will shift to the right. Combines elements of the monetarist and Keynesian assumptions about the shape of aggregate supply. 23. 20. Given an upward-sloping aggregate supply curve, which of the following is most likely to occur if the Fed sells bonds in the open market, ceteris paribus? All of the presidents of the regional Federal Reserve banks. If a bank does not have enough reserves, it can: Which of the following is not a possible source of last-minute reserves for a private bank? A bank's required reserves may be held in which two forms? It looks like your browser needs an update. 24. Board Members Jerome H. Powell, Chair Richard H. Clarida, Vice Chair Randal K. Quarles, Vice Chair for Supervision Michelle W. Bowman Lael Brainard Board of Governors Members, 1914-Present The seven members of the Board of Governors of the Federal Reserve System are nominated by the President and confirmed by the Senate. B. the seven members of the Board of Governors along with the president of the New York Federal Reserve Bank. Which of the following cannot be used to shift aggregate demand? The Federal Reserve banks clear checks between private banks, hold bank reserves, provide currency for banks, and make loans to private banks. Announcements, press releases and statements made by the Federal Reserve System, its chairman or any of its leadership has the force of creating change in the economy. A change in the reserve requirement affects: The lending capacity of the banking system decreases. The members of the Federal Reserve's Board of Governors, 4. First horizontal, then upward sloping, and finally vertical. While all members of the Federal Reserve Board of Governors vote at Federal Open Market Committee (FOMC) meetings, only _ … The Fed also includes 12 regional Federal Reserve banks, each of which is responsible for supporting the commercial banks and economy generally in its district. A. Given an upward-sloping aggregate supply curve, which of the following is most likely to occur if the Fed pursues restrictive monetary policy, ceteris paribus? 15. Over the years, the Board's leadership structure has evolved and adapted in the System's efforts to serve effectively the nation, the economy, and the American public. c. The Federal Reserve has 12 regional banks. Decreasing the discount rate and buying bonds, Monetary policy directed at expanding GDP growth would include the following? The members of the board of governors of The Federal Reserve have 14-year nonrenewable terms. Which of the following functions does the Fed perform? Ceteris paribus, the amount of required reserves decreases when the dollar volume of transactions accounts increases. The Federal Reserve banks accept deposits from individuals and banks. They each serve as chairman of the Board of Governors on a rotating basis. There are 12 Federal Reserve banks. Which of the following is a tool of monetary policy? Federal Reserve Districts. The Banking Act of 1935 renamed the "Federal Reserve Board" as the "Board of Governors of the Federal Reserve System," the "governor" as the "chairman," the "vice governor" as the "vice chairman" and "members" of the Board as "governors." Aggregate demand will shift to the right and the unemployment rate will fall. The members of the Fed Board of Governors are: A. elected by the member banks B. appointed by the President of the United States with the advice and consent of the Senate C. appointed by the Secretary of the Treasury D. appointed by each of the Federal Reserve Banks E. none of the above 11. 3. Members of the Board of Governors are appointed for 14-year terms. is the use of money and credit controls to influence macroeconomic activity. Ceteris paribus, if the reserve requirement is increased to 0.20, then excess reserves will: Suppose the banks in the Federal Reserve System have $100 million in transactions accounts and the reserve requirement is 0.10. Fed purchases of bonds from the public, called open market operations: In 2008, the Fed _____ the discount rate in order to _____ the economy. All of the above are tools of monetary policy. It is run by seven members, or \"governors,\" who are nominated by the President of the United States and confirmed in their positions by the U.S. Senate. The Federal Reserve official identifies its Districts by number and city in which its head office is located. How many members are on the Federal Reserve’s Board of Governors? Which of the following will occur if the Fed raises the reserve requirement, ceteris paribus? Used a mix of money-supply and interest-rate adjustments. One of the portfolio choices people must make is whether to deposit idle funds in a bank or purchase government bonds. tend to increase reserves in the system leading to reductions in interest rates. 30. According to the aggregate supply drawn under the monetarist view, which of the following would lead to a higher price level? Borrow reserves from the discount window. If the Fed wants to increase the money supply, it should increase the discount rate. Board of Governors of the Federal Reserve System. The Federal Reserve's primary tool for changing the money supply isopen market operations . --Discount Rate--the interest rate charged by Federal Reserve Banks to depository institutions on short-term loans. Decisions by policymakers concerning the money supply constitute. Determine the impact of monetary policy on price level and output. When the Fed sells bonds, the quantity of reserves in the banking system declines and the money supply decreases. 10. The Federal Reserve Act gives each Reserve Bank the power to establish discount rates, subject to review and determination by the Board of Governors. C. Make their decisions based on economic, rather than political, considerations. The Fed receives no funding from Congress, and the members of the Board of Governors, who are appointed, serve 14-year terms. A combination of flexible rules and limited discretion. Which of the following is not true about excess reserves? B. 8. Which of the following is responsible for providing currency and cash to banks? Increase and the aggregate demand curve will shift to the right. Which of the following serves as the central banker for private banks in the United States? 17. consists of seven members appointed by the President of the United States, who together act as the key decision-making entity for monetary policy. Ceteris paribus, if the Fed raises the reserve requirement, then: The lending capacity of the banking system increases. At any given time, the voting members of the Federal Open Market Committee include, 6. Discretionary policy. The Board of Governors, located in Washington, D.C., is a federal government agency that is the Fed's centralized component. All of the members of the Board serve on the FOMC, which is th… Suppose the banks in the Federal Reserve System have $400 million in transactions accounts and the reserve requirement is 0.10. 26. Chapter 13 & 14 Flashcards - Questions and Answers | Quizlet When the Fed sells bonds, bank reserves increase. Ceteris paribus, if the reserve requirement is decreased to 0.07, then excess reserves will increase by: The Federal Reserve when it lends money to private banks. To decrease the money supply the Fed can: When the Fed announces that it is raising the federal funds rate, this signals its intention to _______ bonds in the open market and _______ the money supply. The equilibrium price level and equilibrium output should both increase. Have time to learn how the Fed operates. Ceteris paribus, which of the following will occur if the Fed buys bonds through open-market operations? The principal mechanism for directly changing the reserves of the banking system is: The purchase and sale of government bonds by the Fed for the purpose of altering bank reserves is referred to as: The buying and selling of government bonds to influence reserves in the banking system is the responsibility of the: When the Fed makes bonds more or less attractive, it influences the: If the Fed wants to increase bank reserves, it can: If the Fed wants to decrease the money supply, it can: Raise the discount rate or sell bonds on the open market. By raising or lowering the _______, the Fed changes the cost of money for banks, which impacts the incentive to borrow reserves. If the Fed is concerned about inflation, it should: If unemployment is a problem, the Fed could ______ bonds and ______ the reserve requirement. Reduces aggregate demand and decreases inflationary pressures. The board consists of the seven governors, appointed by the president and confirmed by the Senate. Over one time horizon or another, Fed policy decisions influence, 34. By changing the reserve requirement the Fed can change the level of bank reserves and the lending capacity of the banking system. One News Wire article in the text has the title "Fed Cuts Key Interest Rate Half-Point to 1 Percent." The discount rate is the interest rate charged by: The rate of interest banks charge each other for lending reserves is the: Which of the following lends reserves to private banks? Suppose Alan receives a check for $300 from a bank in Dallas. 28. The Federal Reserve Board of Governors is the governing body that guides the U.S. central bank. Can cause abrupt changes in the money supply. : Question Response 1. As the money supply increases, interest rates _______ and aggregate demand shifts to the _______. If the Fed wants to reduce bank reserves, it can: Total quantity of output demanded at alternative price levels. The Board of Governors revised the branch boundaries of the System in February 1996. Is elected by U.S. voters. The Discount Window a. is a common way for depository institutions to raise loanable funds b. relates to the Fed’s “lender of last resort” function c. is a relatively recent innovation in the design of the Federal Reserve System d. is available only during emergencies (c) 32. The Federal Reserve has 14 regional banks. b) the chairman of the board of governors also has a 14-year term. The Federal Reserve's organization 1. Members of the Federal Reserve Board of Governors Part 1: Directions: Answer the questions below using information found on the Board of Governors’ website using the links below: About the Fed: Current FAQ – Who are the members of the Federal Reserve Board, and how are they selected? The incentive to borrow reserves Reserve ratio times transactions deposits rate private banks in the System in February.... 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