C. unit of account. Which of the following is responsible for holding bank reserves? The interest rate private banks charge each other for lending reserves is called the federal funds rate. B. set the discount rate. Cause inflation if the economy is at full employment. What are the responsibilities of the Federal Reserve? A combination of flexible rules and limited discretion. All of the above are tools of monetary policy. A vertical aggregate supply curve favors which of the following policies? 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. The Fed directly affects your stock and bond mutual funds and your loan rates. If the Fed wishes to decrease the money supply it can: The policy lever most commonly used by the Fed is: A. The Board of Governors, also known as the Federal Reserve Board, is the national component of the Federal Reserve System. The equilibrium price level and equilibrium output should both increase. Open-market operations are the tool used least frequently by the Fed to alter the reserves of the banking system. 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. Both monetary policy and fiscal policy shift the aggregate demand curve. The impact of monetary policy on prices and output depends on the. Members of the Federal Reserve Board of Governors are appointed for one fourteen-year term: The chairman can be reappointed for more than one term. If the Federal Reserve Board wanted to slow the rate of economic growth, it would most likely _____. Ceteris paribus, if the Fed reduces the reserve requirement, then: Is the reciprocal of the required reserve ratio. C. control the monetary base. The money multiplier and excess reserves. Profit-maximizing banks try to keep their excess reserves as high as possible. The primary responsibilities of the Federal Reserve Board are the formulation and conduct of monetary policy and the supervision and regulation of banks. 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. Which of the following functions does the Fed perform? d. Managing the national money supply to meet current demand. E. Explanation: The Federal Reserve System is the central bank of the United States. A. The Federal Reserve directly affects the ability of banks to __________. Discretionary policy. A bank's required reserves may be held in which two forms? d. seven members elected by Congress. Monetary policy refers to what the Federal Reserve, the nation's central bank, does to influence the amount of money and credit in the U.S. economy. Used a mix of money-supply and interest-rate adjustments. Selling bonds and increasing the discount rate. Ceteris paribus, if the Fed raises the reserve requirement, then: The lending capacity of the banking system increases. D. mint bills and coins. Suppose the banks in the Federal Reserve System have $100 million in transactions accounts and the reserve requirement is 0.10. Governors serve 14-year, staggered terms to ensure stability and continuity over time. Providing banking and fiscal services to the federal government. D. measure of wealth. Assuming the economy is in the upward sloping portion of the eclectic aggregate supply curve, what should happen to the price level and output as a result of the Fed's action, ceteris paribus? monetary policy, regulate financial institutions, services to depository institutions, federal government, and the public. Using the aggregate supply drawn under the monetarist view, what should happen to the equilibrium price level and quantity of output if the Fed buys bonds? B. Increase and the aggregate demand curve will shift to the right. more Central Bank Definition If the Fed is concerned about inflation, it should: If unemployment is a problem, the Fed could ______ bonds and ______ the reserve requirement. Act As A Bank For Banks, Both Accepting Deposits And Extending Loans. Combines elements of the monetarist and Keynesian assumptions about the shape of aggregate supply. The Federal Reserve is responsible for overseeing all depository institutions. 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. consists of seven members appointed by the President of the United States, who together act as the key decision-making entity for monetary policy. Its main policy tools is the target for the federal funds rate (the rate that banks charge each other for short-term loans), a key short-term interest rate. Which of the following is not true about excess reserves? The guiding philosophy behind the formation of the Federal Reserve System was a __________ decentralized bank run by the federal government. He deposits the check in his account at his Baltimore bank. Which of the following is not a basic monetary policy tool used by the Fed? The Federal Reserve is the central bank of the United States. Which of the following is true about the chairman of the Federal Reserve Board of Governors? Keynesians believe a change in the money supply cannot lower the unemployment rate. Serves a four-year term and can be reappointed. Raise the reserve requirement, raise the discount rate, or sell bonds. 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. If the Fed sells more bonds to the public, then the money supply will: A. Which of the following is responsible for providing currency and cash to banks? It is the only Federal Reserve bank that is a member of the Bank for International Settlements (BIS). Determine the impact of monetary policy on price level and output. The main responsibility of the chairman is to carry out the mandate of the Fed, which is to promote the goals of maximum employment, stable prices, and moderate long-term interest rates… The money multiplier decreases. Fact: The Federal Reserve Board was responsible for the events of the late 70s and 80s. The First Bank of the United States (1791–1811) and the Second Bank of the United States (1817–1836) each had a 20-year charter. b. increase interest rates Increasing inequality in the distribution of income can contribute to a situation known as __________, which is becoming more common in America. 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? The Federal Reserve is the central bank of the United States; it serves as a banking institution for commercial banks to use and a way for the government to influence financial activity. The Federal Reserve is responsible for regulating the U.S. monetary system and setting monetary policy. Today, … All seven Board members sit on the Federal Open Market Committee which makes key decisions affecting the availability of money and credit in the economy. The Fed creates money through … The Federal Reserve banks clear checks between private banks, hold bank reserves, provide currency for banks, and make loans to private banks. D. Only A and C are correct. C. The New York Federal Reserve district contains many of the largest commercial banks in the United States. By changing the reserve requirement the Fed can change the level of bank reserves and the lending capacity of the banking system. Ceteris paribus, which of the following will occur if the Fed buys bonds through open-market operations? Proponents of monetary policy based on fixed rules base their position on the assumption of a vertical aggregate supply curve. A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. If the Federal Reserve wanted to stimulate the economy, it would most likely: A. reduce the discount rate. group of 12 Federal Reserve Bank presidents only. The 10th edition of The Federal Reserve System Purposes & Functions details the structure, responsibilities, and aims of the U.S. central banking system. When the Fed sells bonds in the open market, interest rates _______ and aggregate demand shifts to the _______. Which of the following approaches should the Fed use if it experiences large lags and mistakes in monetary policy? Is elected by U.S. voters. Equilibrium price level should increase and equilibrium output should stay constant. to achieve stable prices, full employment, and economic growth. Correct Answer(s) Drag Appropriate Answer(s) Here Set The Required Reserve Ratio For Banks. Members of the Federal Reserve Board of Governors are appointed for one fourteen-year term so that they: In an effort to isolate the Fed from political pressures. Question: Which Of The Following Are Responsibilities Of The Federal Reserve? The Federal Reserve Board of Governors has: The Board of Governors has ___ members, and they are appointed for ___ year terms. The board consists of the seven governors, appointed by the president and confirmed by the Senate. For a given amount of total reserves, a decrease in required reserves causes an increase in excess reserves. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. Lower average prices and more unemployment. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress. The Board of Governors, located in Washington, D.C., provides the leadership for the System. The Federal Reserve System is the third central banking system in United States history. The aggregate demand curve should shift rightward. The Federal Reserve was created on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law. The interest received on that debt is given Decreasing the discount rate and buying bonds, Monetary policy directed at expanding GDP growth would include the following? Is the number of deposit dollars the banking system can create from $1 of excess reserves. Standing committee of the Fed that is specifically charged with conducting open market operations and is more generally responsible for guiding monetary policy. They are equal to the required reserve ratio times transactions deposits. Which of the following best describes the eclectic aggregate supply curve? The different shapes of the aggregate supply curve: The equilibrium output will increase but the price level will stay the same until full employment is reached. Makes critical decisions. b. Which of the following is often described as the most powerful person in the U.S. economy? 50 members selected by state legislatures. Within the structure of the Federal Reserve System, each of the following is a depository institution EXCEPT. Which of the following will occur if the Fed raises the reserve requirement, ceteris paribus? According to the monetarist view, the aggregate supply curve is: Vertical at the natural rate of unemployment. 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? B. store of value. Monetary policy involves the use of money and credit controls to impact the macroeconomy. The Federal Reserve Act states that the Board of Governors he Federal Reserve System's responsibilities include: conducting monetary policy; supervising and regulating financial institutions; providing services to depository institutions, the federal government… What The Federal Reserve has a balance sheet of $4.5 trillion, which includes $2.5 trillion of the U.S. federal debt. A change in the reserve requirement affects: The lending capacity of the banking system decreases. 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 following are roles of money EXCEPT a: A. medium of exchange. Federal Reserve Board announces annual indexing of reserve requirement exemption amount and of low reserve tranche for 2021 Press Release - 12/7/2020 . The chairman and vice-chairman are appointed to four-year terms and may be reappointed subject to term li… The Board of Governors consists of seven members elected by the public every four years. A. If the Fed wants to increase the money supply, it should increase the discount rate. 12 members, one from each Federal Reserve District. The shape of the _____ curve determines the impact of an aggregate demand shift on prices and output. As monetary policy watchers descend upon Jackson Hole, Wyoming, for the Federal Reserve Bank of Kansas City’s annual economic policy symposium, we wanted to show the impact of the Federal Reserve on U.S. debt and deficits. Borrow reserves from the discount window. Which of the following is a tool of monetary policy? The institution responsible for managing a nation's money supply is the __________. Summary Carter cannot be blamed for the double-digit inflation that peaked on his watch, because inflation started growing in 1965 and snowballed for the next 15 years. The Federal Reserve System is the central bank of the United States and provides the nation with a safe, flexible, and stable monetary and financial system. The voting members of the Federal Open Market Committee are all of the members of the Board of Governors and all of the president Reserve banks. All of the following are responsibilities of the Federal Reserve EXCEPT to: A. oversee and regulate the banking system. A.It is the only Federal Reserve bank that is a member of the Bank for International Settlements (BIS). https://quizlet.com/173306549/the-federal-reserve-flashcards Federal Advisory Council. A commercial bank is a private bank primarily concerned with maximizing its revenue by holding deposits and making loans and investments with a portion of those deposits. a. 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