Question 1 (1 point)

What private sector agent once acted as a lender of last resort for the U.S. government?

Question 1 options:

	J.P. Morgan
	Henry Ford
	John D. Rockefeller
	all of the above

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Question 2 (1 point)

The money multipliers tend to fall during a financial panic due to a rise in:

Question 2 options:

	the currency deposit ratio.
	lending.
	checkable deposits.
	level of money market deposit mutual funds.

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Question 3 (1 point)

If the Fed buys $100 in securities and the reserve requirement is 10%, according to the simple formula for the money multiplier, the money supply

Question 3 options:

	falls by $100.
	falls by $1000.
	rises by $100.
	rises by $1000.

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Question 4 (1 point)

The goal of quantitative easing is to _____.

Question 4 options:

	increase the prices of (increase the yields of) Treasury bonds in order to control inflation
	decrease the prices of (increase the yields of) Treasury bonds in order to control inflation
	increase the prices of (decrease the yields of) Treasury bonds and increase the money supply directly
	decrease the prices of (increase the yields of) Treasury bonds and decrease the money supply directly

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Question 5 (1 point)

Which of the following is part of the money supply but not high-powered money?

Question 5 options:

	currency
	bonds
	checkable deposits
	gold

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Question 6 (1 point)

The ECB conducts open market operations through purchases and sales of

Question 6 options:

	repos.
	commercial paper.
	bonds.
	all of the above.

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Question 7 (1 point)

During a financial panic, the money supply _____, ceteris paribus.

Question 7 options:

	rises
	falls
	stays the same
	moves with interest rates

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Question 8 (1 point)

Who of the following always serve on the FOMC?

Question 8 options:

	the President of the United States
	the President of the FRBDC
	the President of the FRBNY
	all of the above

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Question 9 (1 point)

If the Fed sells $50 in securities and the reserve requirement is 25%, according to the simple formula for the money multiplier, the money supply

Question 9 options:

	falls by $50.
	falls by $200.
	rises by $50.
	rises by $200.

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Question 10 (1 point)

The Federal Reserve is considered independent because

Question 10 options:

	it has its own source of funds.
	the terms of the Board of Governors is longer than the Presidents.
	the chairman cannot be fired by Congress.
	all of the above.

Question 11 (1 point)

Which of the following is not a program developed by the Fed during the 2008 financial crisis?

Question 11 options:

	TAF
	PDFC
	CPFF
	TRAPS

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Question 12 (1 point)

If the required reserve ratio is 0.1, the level of deposits is $1,000, the level of currency held by the public is $200 and the level of excess reserves is $300, then m1 is

Question 12 options:

	0
	1
	2
	3

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Question 13 (1 point)

After the FOMC announces a change in the target fed funds rate, the Fed's trading desk in New York engages in a(n) _____ open market operation.

Question 13 options:

	offensive
	dynamic
	aggressive
	none of the above

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Question 14 (1 point)

Which of the following are goals of the Federal Reserve?

Question 14 options:

	low employment
	low, stable inflation
	low exchange rates
	all of the above

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Question 15 (1 point)

When the Fed makes an open market sale of bonds the _____ of reserves shifts to the

Question 15 options:

	demand, left.
	demand, right.
	supply, left.
	supply, right.

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Question 16 (1 point)

If the required reserve ratio is 0.2, the level of deposits is $1,000, the level of currency held by the public is $100, the level of excess reserves is $100, the level of money market funds is $1,000 and the level of time deposits is $2,000, then m2 is ____.

Question 16 options:

	3.5
	8.5
	11
	20.5

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Question 17 (1 point)

Which tool does the Fed use most commonly to control the money supply?

Question 17 options:

	changing the discount rate
	changing the reserve requirement
	open market operations
	none of the above

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Question 18 (1 point)

In practice, the primary tool used by the Federal Reserve to control the money supply is

Question 18 options:

	discount lending.
	the reserve requirement.
	open market operations.
	buying commercial paper.

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Question 19 (1 point)

A difference between m1 and m2 is that m2 takes ____ into account.

Question 19 options:

	time deposits
	excess reserves
	the currency ratio
	coins and notes

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Question 20 (1 point)

Which of the following is NOT a function of the Federal Reserve?

Question 20 options:

	conduct economic research
	regulate brokers and insurance companies
	evaluate bank mergers
	These are all functions of the Fed.