ECON 3371 EXAM 2 P. TRONCOSCO WITH 100% DETAILED CORRECT
ANSWERS 2025/2026 STUDY SET, Exams of Organization and Business
Administration
The primary reason for the creation of the Federal Reserve System was -
ANSWERto reduce or eliminate future bank panics
Why was the Federal Reserve System set up with twelve regional Federal
Reserve banks rather than one central bank, as in other countries? -
ANSWERThe writers of the Federal Reserve Act. wanted to ensure the Fed's
power was not centralized in a single location.
Which of the following is not part of the checks and balances of the federal
reserve system? - ANSWERThe requirement that all depository institutions
keep deposits at the Fed.
Which of the follwoing entities in the federal reserve system controls the
discount rate? - ANSWERthe board of governors
which of the following entities in the federal reserve system sets reserve
requirements? - ANSWERthe board of governors
, which of the following entities in the federal reserve system directs open
market operations? - ANSWERthe FOMC
how does the federal reserve have a high degree of instrument
independence? - ANSWERthe federal reserve can choose any method it
wants in order to achieve a given set of policy objectives
if the federal reserve has a specific mandate from congress to achieve
"maximum employment and low, stable prices," then how does the fed have
goal independence? - ANSWERthe fed is free to interpret exactly what these
objectives mean.
the fed is the most independent of all us government agencies. what is the
main difference between it and other government agencies that explains the
feds greater indpendence? - ANSWERthe fed's source of revenue is free from
the appropriations process.
what is the primary tool that congress uses to exercise some control over the
fed? - ANSWERthe threat that congress will acquire greater control over the
fed's finances and budget
eliminating the feds independence might lead to a more pronounced political
business cycle because a politically exposed fed would be more concerned
with - ANSWERshort-run objectives and thus be more likely to engage in
expansionary policies designed to lower unemployment and interest rates
before an election.
critics of fed independence argue that - ANSWERit is undemocratic to have
monetary policy controlled by an elite group responsible to no one
ANSWERS 2025/2026 STUDY SET, Exams of Organization and Business
Administration
The primary reason for the creation of the Federal Reserve System was -
ANSWERto reduce or eliminate future bank panics
Why was the Federal Reserve System set up with twelve regional Federal
Reserve banks rather than one central bank, as in other countries? -
ANSWERThe writers of the Federal Reserve Act. wanted to ensure the Fed's
power was not centralized in a single location.
Which of the following is not part of the checks and balances of the federal
reserve system? - ANSWERThe requirement that all depository institutions
keep deposits at the Fed.
Which of the follwoing entities in the federal reserve system controls the
discount rate? - ANSWERthe board of governors
which of the following entities in the federal reserve system sets reserve
requirements? - ANSWERthe board of governors
, which of the following entities in the federal reserve system directs open
market operations? - ANSWERthe FOMC
how does the federal reserve have a high degree of instrument
independence? - ANSWERthe federal reserve can choose any method it
wants in order to achieve a given set of policy objectives
if the federal reserve has a specific mandate from congress to achieve
"maximum employment and low, stable prices," then how does the fed have
goal independence? - ANSWERthe fed is free to interpret exactly what these
objectives mean.
the fed is the most independent of all us government agencies. what is the
main difference between it and other government agencies that explains the
feds greater indpendence? - ANSWERthe fed's source of revenue is free from
the appropriations process.
what is the primary tool that congress uses to exercise some control over the
fed? - ANSWERthe threat that congress will acquire greater control over the
fed's finances and budget
eliminating the feds independence might lead to a more pronounced political
business cycle because a politically exposed fed would be more concerned
with - ANSWERshort-run objectives and thus be more likely to engage in
expansionary policies designed to lower unemployment and interest rates
before an election.
critics of fed independence argue that - ANSWERit is undemocratic to have
monetary policy controlled by an elite group responsible to no one
