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Multiple Choice



1

The three branches of the Federal Reserve System include each of the following EXCEPT:
A)The Board of Governors.
B)The Federal Open Market Committee.
C)The U.S. Treasury.
D)The Twelve regional Reserve Banks.
2

The Federal Reserve was created in:
A)1939
B)1919
C)1929
D)1913
3

Currently the requirement of holding a non-interest earning reserve account at the Fed. must be met by:
A)Only nationally chartered banks.
B)Only member banks.
C)Member banks and non-member banks over $100 million in assets.
D)All banks, member or not.
4

The Federal Reserve Districts are a product of:
A)Economic and political forces as well as population distribution.
B)Solely economic forces that existed at the time of the Federal reserve Act.
C)Economic and political forces that existed at the time the Fed was formed.
D)Solely population distribution at the time of the Federal Reserve Act.
5

In their role as the Government's bank, the Federal Reserve performs the following services EXCEPT:
A)Issue new currency.
B)Manage U.S. Treasury borrowings.
C)Maintain the U.S. Treasury's bank account.
D)Set the discount loan rate.
6

Buying and selling U.S. Treasury Securities for the Fed's own portfolio is called:
A)Managing the Treasury account.
B)Discount buying.
C)Open Market Operations.
D)Reserve adjustment.
7

The Largest Federal Reserve District geographically is serviced by:
A)The Reserve bank in New York.
B)The Reserve bank in Chicago.
C)The Reserve bank in San Francisco.
D)The districts are divided fairly equally geographically.
8

Current law regarding the Fed's Board of Governors stipulates that:
A)No more than one governor can come from the same district.
B)No more than two governors can come from the same district.
C)Every district must have at least one governor on the board.
D)No more than three governors can come from the same district.
9

The permanent voting members on the FOMC include:
A)The Chairman of the Fed Board of Governors..
B)The Secretary of the Treasury.
C)The President of the Federal Reserve Bank of Atlanta.
D)The Director of FDIC.
E)a and c
10

The federal funds rate is;
A)The interest rate the Fed charges banks who borrow from them.
B)The interest rate the U.S. Treasury charges banks that need emergency funds.
C)The interest rate banks charge each other for overnight loans of their excess reserves at the Fed.
D)The interest rate the FDIC charges banks who need to borrow from them to meet depositor demands.
11

The FOMC controls the real interest rate if:
A)Inflation is slow to adjust.
B)Inflation changes quickly.
C)Only if they adjust the federal funds rate to match the changes in the rate of inflation.
D)None of the above.
12

FOMC meetings would best be described as:
A)Fairly formal sessions with little to no give and take.
B)An informal meeting with the Chairman as a passive observer.
C)Informal meetings with significant give and take among participants.
D)A press conference, where the financial press can ask questions regarding the Fed's view of the economy.
13

Which statement best completes the following sentence; "The U.S. dollar is to the fifty states as the euro is to...":
A)The European Central Bank.
B)The European System of Central Banks.
C)The National Central Banks.
D)The Euro area.
14

The Agreement to form a European monetary union was formalized in the Treaty of:
A)Milan.
B)Paris
C)Versailles.
D)Maastricht
15

One key difference concerning the communications from the Fed's FOMC and the European Systems Governing Council is:
A)The president and vice-president of the Governing Council hold a news conference after their regular monthly meetings; the leaders of the FOMC hold no such conference.
B)The leaders of the FOMC answer questions from the financial press immediately after their meetings
C)The Governing Council meetings are open to the public, the FOMC meetings are not.
D)The Chairman of the Fed lets his position be known before the meeting where the President of the Governing Council does not.





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