Midterm 2

How many federal reserve regional banks are there?

The Federal Reserve's Role as a lender of last resort involves lending to who? A) US Banks that cannot borrow anywhere else B)U.S. state governments when they run short on tax revenues C) Governments in developing countries during currency crises

The federal reserve's primary tool for changing the money supply is the A) Reserve Requirement B) Discount Rate C) Open market operation

In order to increase the number of dollars in the US economy (money supply), the federal reserve will ___ government bonds? A) buy B) sell

In order to decrease the number of dollars in the US economy (money supply), the federal reserve will ___ government bonds? A) buy B) sell

The FOMC is made up of the ____ members of the board of governors and _____ of the twelve regional bank presidents A) 7, 5 B) 5, 7 C) 6, 9 D) 9, 6

Which of the following is a responsibility of the Federal Open Market Committee (FOMC)? A) Making decisions regarding monetary policy B) Issuing mortgages to homeowners C) Buying and selling stocks

Which bank conducts all open-market operations for the Federal Reserve System? A) Dallas Federal Reserve B) LA Federal Reserve C) New York Federal Reserve D) Chicago Federal Reserve

Which of the 12 regional federal bank presidents always gets a vote? A) Dallas B) New York C) Chicago D) LA

How often does the FOMC meet? A) approximately every 2 months B) approximately every 6 weeks C) approximately every month D) approximately every 3 months

The Fed is run by its A) Regional Presidents B) Board of Governors C) Committee Heads

There are how many board of governors that run the Fed? A) 5 B) 7 C) 12 D) 9

How long are board of governor terms? A) 14 year terms B) 4 year terms C) 2 year terms D) 8 year terms

The most important member of the board of governors is called the ____ A) President B) Leader C) Chairman D) Department Head

The chairman of the board of governors has how long of a term? A) 3 years B) 4 years C) 5 years D) 6 years

The Chairman ____ A) directs Fed Staff B) Presides over board meetings C) testifies about Fed policy in front of congressional committees D) all of the above

The current chairman of the federal reserve is who? A) President Obama B) Ben Bernanke C) Nancy Pelosi D) Hilary Clinton

The members of the board of governors are ___ A) voted in by the US as a whole B) voted in by the senate C) appointed by the president D) elected by congress

Which of the following contributes to making the Federal Reserve an independent policymaking body? A) Members of the Board of Governors are appointed for 14-year terms. B) Its role is written into the U.S. Constitution. C)There are 12 Federal Reserve banks.

Gilberto wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1,299, and the vacation is priced at $750. He has only $1,537 in his checking account, so he cannot afford to purchase both. After much thought, Gilberto buys the computer and writes a check for $1,299. What is the medium of exchange? A) Gilberto has $1,537 in his checking account. B) Gilberto writes a check for $1,299. C) Gilberto can easily determine that the price of the computer is more than the price of the vacation.

Gilberto wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1,299, and the vacation is priced at $750. He has only $1,537 in his checking account, so he cannot afford to purchase both. After much thought, Gilberto buys the computer and writes a check for $1,299. What is the Unit of account? A) Gilberto has $1,537 in his checking account. B) Gilberto writes a check for $1,299. C) Gilberto can easily determine that the price of the computer is more than the price of the vacation.

Gilberto wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1,299, and the vacation is priced at $750. He has only $1,537 in his checking account, so he cannot afford to purchase both. After much thought, Gilberto buys the computer and writes a check for $1,299. What is the store of value? A) Gilberto has $1,537 in his checking account. B) Gilberto writes a check for $1,299. C) Gilberto can easily determine that the price of the computer is more than the price of the vacation.

What are the 3 functions of money?

Which is a function of money? A) medium of exchange B) unit of account C) store of value D) all of the above

what function of money is an item that buyers give to sellers when they purchase goods and services? A) medium of exchange B) unit of account C) store of value D) all of the above

what function of money is the yardstick people use to post prices and record debts? A) medium of exchange B) unit of account C) store of value D) all of the above

what function is an item that people can use to transfer purchasing power from the present to the future? A) medium of exchange B) unit of account C) store of value D) all of the above

Assets 1.The funds in a money market account 2.A $5 bill 3.A share in a publicly traded company 4.Your house List in terms of most liquid to least liquid A) 1, 4, 2, 3 B) 2, 3, 1, 4 C) 2, 1, 3, 4 D) 1, 2, 4, 3

_____ refers to how quickly an asset can be converted into a medium of exchange A) liquidity B) reliability C) fastness

An item has ____ value if it has value outside of its use as money

Money taking the form of a commodity with intrinsic value is known as _____ A) fiat money b) commodity money

Money whose value derives from government decree is known as ____ A) fiat money b) commodity money

What is the most liquid asset?

What is the term for the quantity of money circulating in the economy?

What is the term for the paper bills and coins in the hands of the public?

What are the balances in bank accounts that depositors can access on demand simply by writing a check or swiping a debit card at a store?

Does this belong to M1 or M2? Lorenzo has a roll of quarters that he just withdrew from the bank to do laundry. A) M1 B) M2 C) both

Does this belong to M1 or M2? Sam has $25,000 in a money market account. A) M1 B) M2 C) Both

Does this belong to M1 or M2? Teresa has $8,000 in a two-year certificate of deposit (CD). A) M1 B) M2 C) Both

What are the Fed tools of monetary control? A) Reserve Requirement B) Discount Rate C) Open market operation D) all of the above

Which Fed tools influence the quantity of reserve? A) Reserve Requirement B) Discount Rate C) Open market operation D) all of the above E) A & B F) A & C G) B & C