Question 1

As of 2019, there have been how many Chairmen of the Federal Reserve?

Accepted Answer

A)   14
B)   15
C)   16
D)   17

Question 2

The least used monetary policy instrument used by the Fed is

Accepted Answer

A)   open market operations
B)   changing the discount rate
C)   changing the reserve requirement
D)   issuing treasury bills

Question 3

Quantitative easing is when the Fed engages in purchasing financial assets from banks and other financial institutions with newly created money, resulting in larger bank excess reserves and increased money supply and liquidity.

Accepted Answer

A) True 
 B)False

Question 4

Under the authority of the Federal Reserve Act of 1913

Accepted Answer

A)   all national and state-chartered banks must become members of the Fed.
B)   only national banks were permitted to become members of the Fed.
C)   state-chartered banks were permitted to withdraw from membership with the Fed.
D)   a system of deposit insurance was created.

Question 5

The Federal Reserve act required that all national banks were to become members of the Fed.

Accepted Answer

A) True 
 B)False

Question 6

The Federal Reserve Banks are owned by

Accepted Answer

A)   commercial banks.
B)   the U.S. Treasury.
C)   national member banks of the Federal Reserve System.
D)   member banks of the Federal Reserve System.

Question 7

____________________________ requires disclosure of the finance charge and the annual percentage rate of credit along with certain other costs and terms to permit consumers to compare the prices of credit from differing sources.

Accepted Answer

A)   Truth in Lending Act
B)   Equal Credit Opportunity Act
C)   Federal Trade Commission Improvement Act
D)   Fair Credit Billing Act

Question 8

Before the Federal Reserve System was created, a large part of the reserves of commercial banks was

Accepted Answer

A)   in the form of state and federal government bonds.
B)   deposited with the United States Treasury.
C)   held as deposits with large city banks.
D)   held as cash in their vaults.

Question 9

The principle examining activity of the Federal Reserve System is directed to

Accepted Answer

A)   all state-chartered banks
B)   state-chartered member banks
C)   all national banks
D)   all state-chartered and national banks

Question 10

The five components of the Federal Reserve System include:

Accepted Answer

A)   Member banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Monetary Committees.
B)   Nonmember banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Advisory committees.
C)   Member banks, Federal Reserve District Banks, Board of Governors, Federal Open Market Committee, Advisory committees.
D)   Member banks, Federal Reserve District Banks, Board of Governors, Federal Closed Market Committee, Advisory committees.

Question 11

The Consumer Credit Protection Act requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

Accepted Answer

A) True 
 B)False

Question 12

Member banks of the Federal Reserve System

Accepted Answer

A)   must maintain all reserves with their Federal Reserve Bank.
B)   may include deposits held at large city banks as legal reserves.
C)   maintain levels of reserves based on the size of the city in which they are located.
D)   are permitted to count vault cash as part of their reserves.

Question 13

As of early 2019, nearly all the checks processed for collection by Federal Reserve Banks are still received as paper checks.

Accepted Answer

A) True 
 B)False

Question 14

The accommodative actions of the Fed includes buying treasury securities.

Accepted Answer

A) True 
 B)False

Question 15

The most used monetary policy instrument used by the Fed is

Accepted Answer

A)   open market operations.
B)   changing the discount rate.
C)   changing the reserve requirement.
D)   issuing securities.

Question 16

One of the major weaknesses of the banking system before the Federal Reserve System was set up was

Accepted Answer

A)   the arrangement for holding reserves.
B)   the lack of a deposit insurance system.
C)   a lack of currency and coin.
D)   an inadequate supply of government bonds.

Question 17

The Fed controls the _____ supply.

Accepted Answer

A)   credit
B)   mortgage
C)   money
D)   credit card balances

Question 18

Because of the National Banking Act, the volume of national bank notes depends on the government bond market rather than the seasonal or cyclical needs of the nation for currency.

Accepted Answer

A) True 
 B)False

Question 19

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called dynamic actions.

Accepted Answer

A) True 
 B)False

Question 20

Federal Reserve actions that offset unexpected monetary developments and contribute to the smooth everyday functioning of the economy are called

Accepted Answer

A)   defensive actions.
B)   dynamic actions.
C)   accommodative actions.
D)   automatic actions.

Exam 4: Federal Reserve System

Because of the National Banking Act, the volume of national bank notes depends on the government bond market rather than the seasonal or cyclical needs of the nation for currency.

Correct AnswerverifiedShow Answer

Federal Reserve actions that stimulate or repress the level of prices or economic activity are called dynamic actions.

Correct AnswerverifiedShow Answer

Quantitative easing is when the Fed engages in purchasing financial assets from banks and other financial institutions with newly created money, resulting in larger bank excess reserves and increased money supply and liquidity.

Correct AnswerverifiedShow Answer

The least used monetary policy instrument used by the Fed is

Correct AnswerverifiedShow Answer

As of 2019, there have been how many Chairmen of the Federal Reserve?

Correct AnswerverifiedShow Answer

The Federal Reserve act required that all national banks were to become members of the Fed.

Correct AnswerverifiedShow Answer

The Fed controls the _____ supply.

Correct AnswerverifiedShow Answer

As of early 2019, nearly all the checks processed for collection by Federal Reserve Banks are still received as paper checks.

Correct AnswerverifiedShow Answer

The most used monetary policy instrument used by the Fed is

Correct AnswerverifiedShow Answer

Before the Federal Reserve System was created, a large part of the reserves of commercial banks was

Correct AnswerverifiedShow Answer

One of the major weaknesses of the banking system before the Federal Reserve System was set up was

Correct AnswerverifiedShow Answer

Under the authority of the Federal Reserve Act of 1913

Correct AnswerverifiedShow Answer

The Consumer Credit Protection Act requires that lenders clearly explain consumer credit costs and prohibited them from charging overly high-priced credit transactions.

Correct AnswerverifiedShow Answer

____________________________ requires disclosure of the finance charge and the annual percentage rate of credit along with certain other costs and terms to permit consumers to compare the prices of credit from differing sources.

Correct AnswerverifiedShow Answer

The five components of the Federal Reserve System include:

Correct AnswerverifiedShow Answer

The Federal Reserve Banks are owned by

Correct AnswerverifiedShow Answer

The accommodative actions of the Fed includes buying treasury securities.

Correct AnswerverifiedShow Answer

Member banks of the Federal Reserve System

Correct AnswerverifiedShow Answer

The principle examining activity of the Federal Reserve System is directed to

Correct AnswerverifiedShow Answer

Federal Reserve actions that offset unexpected monetary developments and contribute to the smooth everyday functioning of the economy are called

Correct AnswerverifiedShow Answer

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