QUESTION 1 What is the central bank? A bank that regulates the money supply A bank that regulates the interest rate. A bank that regulates other financial institutions. All of the above QUESTION 2 What is the base money? The most complicated form of money in a society The most basic form of money in a society A cashless economy None of the above QUESTION 3 "From 1873 until late 1914, the USA had no?" Real assets Inflation rates Central Bank Freedom QUESTION 4 How many district banks represent the Federal Reserve System? 12 21 7 13 QUESTION 5 Which of the following states does not have a district bank? New York Illinois Ohio New Jersey QUESTION 6 What do district banks do? Apply monetary policies Clear checks Manipulate inflation rates Oversee unemployment rates QUESTION 7 What does ECB stand for? European Committee of Central Banks European Central Banks European Ecosystem of Banks None of the above QUESTION 8 What does it mean that the Central Bank has autonomy? Its dependent on other government bodies Its independent of other government bodies QUESTION 9 Which of the following items make up the Monetary Base? Currency in circulation Reserves All of the above QUESTION 10 What are open market operations? Purchase or sale of assets by a central bank in order to adjust the money supply Purchase or sale of bonds and stocks by a central bank in order to adjust the inflation rate Purchase or sale of assets by a foreign central bank in order to adjust the money supply Purchase or sale of assets by a central bank in order to adjust the unemployment rates QUESTION 11 What is the formula for the simple deposit multiplier formula? 1*rr / change in R 1*rr* change in R 1/rr * change in rr 1/rr * change in R QUESTION 12 Which of the following make up M1money? Checkable deposits Travelers checks Demand deposits All of the above QUESTION 13 Does M1 include M2? Yes No QUESTION 14 According to the U.S. MB and M1, between 1959-2007 (figure 15.2), between what years is the difference the greatest beween MB and M1?" 1959-1963 1971-1975 1995-1999 1983-1987 QUESTION 15 "Under typical conditions, the fed applies monetary policy by adjusting Open market operations Discount rates Federal fund rate Require reserve ratios QUESTION 16 According to the multiple deposits creation and assuming a required reserve ratio of 10%, a $1,000 deposits will lead to?
"1,000,000" "10,000,000" "100,000" "10,000" QUESTION 17 What is a forward guidance? A tactic where the central bank states of its intentions to apply monetary practices A tactic policy where the central bank states of its intentions to apply fiscal practices A tactic policy where the central bank states of its intentions to apply both monetary and fiscal practices A tactic policy where the central bank states of its intentions to apply neither monetary or fiscal practices QUESTION 18 What is quantitative easing? When the central banks expand its bank reserves beyond required to maintain its policy interest rate When the central banks contract its bank reserves beyond required to maintain its policy interest rate When the central banks expand its bank reserves beyond required to increase its policy interest rate When the central banks contract its bank reserves beyond required to increase its policy interest rate QUESTION 19 What is a targeted asset purchase? This occurs when central bankers change composition of liabilities class type for another This occurs when central bankers change composition of equity class type for another This occurs when central bankers change composition of asset class type for another This occurs when central bankers change composition of debt class type for another QUESTION 20 What are overnight rates? Inflation rate at which depository institution lends/borrowers with another institution in the overnight market Interest rate at which depository institution only lends with another institution in the overnight market Interest rate at which depository institution only borrowers with another institution in the overnight market Interest rate at which depository institution lends/borrowers with another institution in the overnight market