At any given time, the voting members of the Federal Open Market Committee include, 6. Ceteris paribus, if the Fed raises the reserve requirement, then: The lending capacity of the banking system increases. According to the Keynesian view of aggregate supply, an increase in the money supply will: Perfectly vertical at the natural rate of unemployment. The Board consists of seven members—nominated by the president and confirmed by the Senate—who each serve 14-year terms, all of which are staggered. If the Federal Open Market Committee decides to increase the money supply, then the Federal Reserve. A vertical aggregate supply curve favors which of the following policies? B. B. the seven members of the Board of Governors along with the president of the New York Federal Reserve Bank. The Federal Reserve Act gives each Reserve Bank the power to establish discount rates, subject to review and determination by the Board of Governors. The problem faced by the Fed stems from two of the Ten Principles of Economics. When the Fed sells bonds in the open market, interest rates _______ and aggregate demand shifts to the _______. All of the presidents of the regional Federal Reserve banks. A combination of flexible rules and limited discretion. If the Federal Reserve wanted to stimulate the economy, it would most likely: A. reduce the discount rate. is the use of money and credit controls to influence macroeconomic activity. The chairman and vice-chairman are appointed to four-year terms and may be reappointed subject to term li… 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. Which of the following is not a basic monetary policy tool used by the Fed? 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. The Federal Reserve does all except which of the following? The board consists of the seven governors, appointed by the president and confirmed by the Senate. Profit-maximizing banks try to keep their excess reserves as high as possible. tend to increase reserves in the system leading to reductions in interest rates. Which of the following is responsible for providing currency and cash to banks? Combines elements of the monetarist and Keynesian assumptions about the shape of aggregate supply. 10. Ceteris paribus, which of the following will occur if the Fed buys bonds through open-market operations? The Federal Reserve System will set the interest rate charged to financial institutions to borrow money. 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. b. are members of the Federal Open Market Committee. is the rate of interest charged by the Fed when it lends money to private banks. Thus: a) they are somewhat insulated from the political process. Over one time horizon or another, Fed policy decisions influence, 34. Members of the Board of Governors are appointed for 14-year terms. According to the monetarist view, the aggregate supply curve is: Vertical at the natural rate of unemployment. The Board of Governors of the Federal Reserve System, commonly known as the … The Board of Governors has 12 members who serve 7-year terms. The members of the board of governors of The Federal Reserve have 14-year nonrenewable terms. Which of the following is true about the chairman of the Federal Reserve Board of Governors? 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? Which of the following policies is supported by the idea that producers and workers will demand higher prices and wages when they see the money supply expanding? The shape of the _____ curve determines the impact of an aggregate demand shift on prices and output. Are the minimum amount of reserves a bank is required to hold. 29. Who among the following is not always a voting member of the FOMC? A. 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? The Board of Governors of the Federal Reserve System is the key decision maker for monetary policy. Have time to learn how the Fed operates. 3. Federal Reserve Districts. Which of the following is not correct? Which of the following is Alan's Baltimore bank likely to collect the $300 from? 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. The reserve requirement is the tool used least frequently by the Fed because it can cause abrupt changes in the money supply. Equilibrium price level should increase and equilibrium output should stay constant. If the Fed wants to reduce bank reserves, it can: Total quantity of output demanded at alternative price levels. The Federal Reserve's primary tool for changing the money supply isopen market operations . The Federal Reserve Board of Governors has: The Board of Governors has ___ members, and they are appointed for ___ year terms. The Federal Reserve Board of Governors in Washington DC. A bank's required reserves may be held in which two forms? One News Wire article in the text is titled "Fed Cuts Key Interest Rate Half-Point to 1 Percent." Members of the Federal Reserve Board of Governors are appointed to 14-year terms to provide a level of isolation from political influence. Monetary policy involves the use of money and credit controls to impact the macroeconomy. By raising or lowering the _______, the Fed changes the cost of money for banks, which impacts the incentive to borrow reserves. The Federal Reserve has 14 regional banks. All of the members of the Board serve on the FOMC, which is th… When the Fed sells bonds, the quantity of reserves in the banking system declines and the money supply decreases. The purchase of bonds in the open market by the Fed. 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. Used a mix of money-supply and interest-rate adjustments. 23. Oh no! Board of Governors of the Federal Reserve System. Which of the following best describes the eclectic aggregate supply curve? The Chairman of the Board of Governors is appointed to a four-year term by the president of the United … The 12 regional Federal Reserve Banks. The Federal Reserve banks clear checks between private banks, hold bank reserves, provide currency for banks, and make loans to private banks. Decisions by policymakers concerning the money supply constitute. Those principles are as follows: 32. Which of the following is responsible for holding bank reserves? The seven-member Board of Governors of the Federal Reserve System determines the reserve requirements of the member banks within statutory limits, reviews and determines the discount rates established by the 12 Federal Reserve banks, and reviews the budgets of the reserve banks. Which of the following cannot be used to shift aggregate demand? The Federal Reserve Board of Governors is the governing body that guides the U.S. central bank. Selling bonds and increasing the discount rate. Determine the impact of monetary policy on price level and output. 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." Suppose Alan receives a check for $300 from a bank in Dallas. 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? When the Federal Reserve sells assets from its portfolio to the public with the intent of changing the money supply. 7. b. The Federal Reserve System is considered an independent central bank because its decisions do not require presidential or executive branch approval. (b) 31. The Board consists of seven members who are appointed by the president of the United States and confirmed by the Senate. The money multiplier decreases. The interest rate private banks charge each other for lending reserves is called the federal funds rate. If the Fed wants to increase the money supply, it should increase the discount rate. 18. Which group within the Federal Reserve System meets to discuss changes in the economy and determine monetary policy? D. Have enough time to travel to all 12 regional banks. All of the above are tools of monetary policy. Which of the following is the Fed trying to accomplish as a result of this action? The Federal Reserve banks accept deposits from individuals and banks. Correct Answer: the Federal Reserve Board of Governors. By increasing the required reserves, the banking industry will have more excess reserves available for lending. If the Fed is concerned about inflation, it should: If unemployment is a problem, the Fed could ______ bonds and ______ the reserve requirement. 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? First horizontal, then upward sloping, and finally vertical. 30. Open-market operations are the tool used least frequently by the Fed to alter the reserves of the banking system. consists of seven members appointed by the President of the United States, who together act as the key decision-making entity for monetary policy. He deposits the check in his account at his Baltimore bank. Lower average prices and more unemployment. Discretionary policy. It looks like your browser needs an update. Are more likely to make politically acceptable decisions. 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. Which of the following serves as the central banker for private banks in the United States? The key decision maker for general Federal Reserve policy is the: The key decision maker for U.S. monetary policy is: Seven members appointed by the president of the United States. Monetary policy involves the use of federal government spending to change the money supply. The president of the United States. The rotating seats are filled from the following four groups of Banks, one Bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; an… ... and the Commonwealth of the Northern Mariana Islands. 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. At any meeting of the Federal Open Market Committee, that committee's voting members consist of. 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. The Board of Governors has 7 members who serve 14-year terms. To ensure the best experience, please update your browser. 27. 13. A. Which of the following will occur if the Fed raises the reserve requirement, ceteris paribus? The impact of monetary policy on prices and output depends on the. Borrow reserves from the discount window. 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? The first Federal Reserve Board was officially sworn in on August 10, 1914. A. Which of the following statements about the Federal Reserve is not correct? Increases, interest rates _______ and aggregate demand curve the quantity of reserves bank... 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