Chapter 13 Quiz

The Federal Reserve entity that makes decisions regarding the conduct of open market operations is the

a) Board of Governors

b) Federal Open Market Committee

c) chairman of the Board of Governors

d) Open Market Advisory Council

b) Federal Open Market Committee

On paper, the Bank of Canada has ________ instrument independence and ________ goal independence when compared to the Federal Reserve System.

a) more; less

b) less; less

c) more; more

d) less; more

b) less; less

An important function of the regional Federal Reserve Banks is

a) clearing checks

b) determining monetary policy

c) setting reserve requirements

d) setting margin requirements

a) clearing checks

In the Governing Council, the decision of what policy to implement is made by

a) majority vote of the Executive Board members

b) consensus

c) majority vote of the heads of the National Banks

d) majority vote of all members of the Governing Council

b) consensus

The theory of bureaucratic behavior when applied to the Fed helps to explain why the Fed

a) sought less control over banks in the 1980s

b) was so secretive about the conduct of future monetary policy

c) was supportive of congressional attempts to limit the central bank's autonomy

d) was willing to take on powerful groups that may threaten its autonomy

b) was so secretive about the conduct of future monetary policy

The First Bank of the United States

a) was disbanded in 1811 when its charter was not renewed

b) had its charter renewal vetoed in 1832

c) was fundamental in helping the Federal Government finance the War of 1812

d) None of these

a) was disbanded in 1811 when its charter was not renewed

Under the European System of Central Banks, the Executive Board is similar in structure to the ________ of the Federal Reserve System.

a) Board of Governors

b) Federal Open Market Committee

c) Federal Reserve Banks

d) Federal Advisory Council

a) Board of Governors

Although reserve requirements and the discount rate are not actually set by the ________, decisions concerning these policy tools are effectively made there.

a) Federal Open Market Committee

b) Board of Governors

c) Federal Reserve Bank of New York

d) Federal Reserve Banks

a) Federal Open Market Committee

The majority of members of the Federal Open Market Committee are

a) members of the Federal Advisory Council

b) Federal Reserve Bank presidents

c) presidents of member banks

d) the seven members of the Board of Governors

d) the seven members of the Board of Governors

Which of the following functions is NOT performed by any of the twelve regional Federal Reserve Banks?

a) check clearing

b) issuing new currency

c) conducting economic research

d) setting interest rates payable on time deposits

d) setting interest rates payable on time deposits