FIN 100 CHAPTER 4 EXAM QUESTIONS
WITH 100% CORRECT ANSWERS
The payment mechanism of the Reserve Bank includes:
a. processing and clearing checks
b. issuing currency and coins
c. electronic forms of payment
d. all the above - Answer- All of the above
The National Banking Acts of 1863 and 1864 were: - Answer- were modified to permit
greater flexibility of operations under the Federal Reserve Act of 1913
The Board of Governors of the Federal Reserve System:
a. consists of 7 appointed members
b. sets reserve requirements
c. approves discount rates as part of monetary policy
d. all the above
e. none of the above - Answer- All of the above
The seven-member board of the Federal Reserve that sets monetary policy is called -
Answer- the Federal Reserve Board of Governors
The Federal Open Market committee:
a. establishes and administers protective consumer finance regulations
b. furnishes currencies
c. handles U.S. government debt and cash balances
d. all the above
e. none of the above - Answer- None of the above
State-chartered banks: - Answer- may be permitted to join the Federal Reserve system,
given a satisfactory financial condition
Members of the Federal Reserve System may include: - Answer- commercial banks
with a national charter
The chairman of the Federal Reserve System:
a. is appointed by the Secretary of the Treasury
b. serves a life term
c. is the president of the New York Federal Reserve Bank
d. none of the above - Answer- None of the above
, Three essential needs of a well-operating financial system include all of the following
EXCEPT: - Answer- a bank insurance system
Which monetary policy tool does the Fed use most infrequently? - Answer- changing
reserve requirements
One significant feature of DIDMCA was that it: - Answer- expanded Fed control over the
reserve requirements of non-member banks
During the time period 1980 - 2012: - Answer- the discount rate was lower than the
prime rate
A central bank serves the nation: - Answer- . by regulating money supply growth
The Federal Reserve System consists of all of the following components EXCEPT:
a. Federal Reserve District Banks
b. Board of Governors
c. Federal Open Market Committee
d. all of the above - Answer- All of the above
The Federal Reserve System consists of all of the following components EXCEPT: -
Answer- Monetary Policy Committee
Federal Reserve actions that offset unexpected monetary developments and contribute
to the smooth everyday functioning of the economy are called - Answer- defensive
actions
The basic policy instruments that the Fed uses to execute monetary policy include all of
the following
EXCEPT
a. changing reserve requirements
b. changing the discount rate
c. conducting open market operations
d. all of the above are monetary policy instruments - Answer- All of the above
The Federal Reserve System (Fed), the central bank of the United States, is
responsible for setting monetary
policy and regulating the banking system.(T/F) - Answer- True
Fannie Mae was created to support the financial markets by purchasing home
mortgages and automobile
loans from banks so that the proceeds could be lent to other borrowers.
(T/F) - Answer- Fasle
Because of the National Banking Act, the volume of national bank notes depends on the
government bond
WITH 100% CORRECT ANSWERS
The payment mechanism of the Reserve Bank includes:
a. processing and clearing checks
b. issuing currency and coins
c. electronic forms of payment
d. all the above - Answer- All of the above
The National Banking Acts of 1863 and 1864 were: - Answer- were modified to permit
greater flexibility of operations under the Federal Reserve Act of 1913
The Board of Governors of the Federal Reserve System:
a. consists of 7 appointed members
b. sets reserve requirements
c. approves discount rates as part of monetary policy
d. all the above
e. none of the above - Answer- All of the above
The seven-member board of the Federal Reserve that sets monetary policy is called -
Answer- the Federal Reserve Board of Governors
The Federal Open Market committee:
a. establishes and administers protective consumer finance regulations
b. furnishes currencies
c. handles U.S. government debt and cash balances
d. all the above
e. none of the above - Answer- None of the above
State-chartered banks: - Answer- may be permitted to join the Federal Reserve system,
given a satisfactory financial condition
Members of the Federal Reserve System may include: - Answer- commercial banks
with a national charter
The chairman of the Federal Reserve System:
a. is appointed by the Secretary of the Treasury
b. serves a life term
c. is the president of the New York Federal Reserve Bank
d. none of the above - Answer- None of the above
, Three essential needs of a well-operating financial system include all of the following
EXCEPT: - Answer- a bank insurance system
Which monetary policy tool does the Fed use most infrequently? - Answer- changing
reserve requirements
One significant feature of DIDMCA was that it: - Answer- expanded Fed control over the
reserve requirements of non-member banks
During the time period 1980 - 2012: - Answer- the discount rate was lower than the
prime rate
A central bank serves the nation: - Answer- . by regulating money supply growth
The Federal Reserve System consists of all of the following components EXCEPT:
a. Federal Reserve District Banks
b. Board of Governors
c. Federal Open Market Committee
d. all of the above - Answer- All of the above
The Federal Reserve System consists of all of the following components EXCEPT: -
Answer- Monetary Policy Committee
Federal Reserve actions that offset unexpected monetary developments and contribute
to the smooth everyday functioning of the economy are called - Answer- defensive
actions
The basic policy instruments that the Fed uses to execute monetary policy include all of
the following
EXCEPT
a. changing reserve requirements
b. changing the discount rate
c. conducting open market operations
d. all of the above are monetary policy instruments - Answer- All of the above
The Federal Reserve System (Fed), the central bank of the United States, is
responsible for setting monetary
policy and regulating the banking system.(T/F) - Answer- True
Fannie Mae was created to support the financial markets by purchasing home
mortgages and automobile
loans from banks so that the proceeds could be lent to other borrowers.
(T/F) - Answer- Fasle
Because of the National Banking Act, the volume of national bank notes depends on the
government bond
