A combination of flexible rules and limited discretion. All of the following are roles of money EXCEPT a: A. medium of exchange. Monetary policy refers to what the Federal Reserve, the nation's central bank, does to influence the amount of money and credit in the U.S. economy. c. Regulating the banking industry and providing banking services. Borrow reserves from the discount window. For a given amount of total reserves, a decrease in required reserves causes an increase in excess reserves. Today, … Apply A Countercyclical Economic Policy To The Money Supply. The Fed has most likely reduced the: If a private bank lends money to another bank, the interest rate that is charged for the loan is the: How many members are there of the U.S. Senate Committee on Banking, Housing and Urban Affairs? Board of Governors only. --Discount Rate--the interest rate charged by Federal Reserve Banks to depository institutions on short-term loans. Both monetary policy and fiscal policy shift the aggregate demand curve. The Federal Reserve is the central bank of the United States. When the Fed sells bonds in the open market, interest rates _______ and aggregate demand shifts to the _______. According to the Keynesian view of aggregate supply, an increase in the money supply will: Perfectly vertical at the natural rate of unemployment. Selling bonds and increasing the discount rate. The Federal Reserve is responsible for regulating the U.S. monetary system and setting monetary policy. Is elected by U.S. voters. The board consists of the seven governors, appointed by the president and confirmed by the Senate. The Board of Governors, located in Washington, D.C., provides the leadership for the System. The voting members of the Federal Open Market Committee are all of the members of the Board of Governors and all of the president Reserve banks. Includes the 7 members of the board of governors. The Federal Reserve System monitors and regulates the US __________ and __________ system. They each serve as chairman of the Board of Governors on a rotating basis. The guiding philosophy behind the formation of the Federal Reserve System was a __________ decentralized bank run by the federal government. One News Wire article in the text has the title "Fed Cuts Key Interest Rate Half-Point to 1 Percent." Fed purchases of bonds from the public, called open market operations: In 2008, the Fed _____ the discount rate in order to _____ the economy. Suppose the banks in the Federal Reserve System have $100 million in transactions accounts and the reserve requirement is 0.10. b. is the rate of interest charged by the Fed when it lends money to private banks. If the Fed sells more bonds to the public, then the money supply will shift to the left. Which of the following cannot be used to shift aggregate demand? The money multiplier and excess reserves. a. Makes critical decisions. Which of the following approaches should the Fed use if it experiences large lags and mistakes in monetary policy? The Federal Reserve directly affects the ability of banks to __________. Federal Reserve Board announces annual indexing of reserve requirement exemption amount and of low reserve tranche for 2021 Press Release - 12/7/2020 . Assuming the economy is in the upward sloping portion of the eclectic aggregate supply curve, what should happen to the price level and output as a result of the Fed's action, ceteris paribus? The Federal Reserve Act states that the Board of Governors Ceteris paribus, if the reserve requirement is decreased to 0.05, then excess reserves will increase by: Suppose the banks in the Federal Reserve System have $1 billion in transactions accounts and the reserve requirement is 0.20. A bank's required reserves may be held in which two forms? Ceteris paribus, if the Fed raises the reserve requirement, then: The lending capacity of the banking system increases. If the Fed wants to increase the money supply, it should increase the discount rate. As monetary policy watchers descend upon Jackson Hole, Wyoming, for the Federal Reserve Bank of Kansas City’s annual economic policy symposium, we wanted to show the impact of the Federal Reserve on U.S. debt and deficits. Given an upward-sloping aggregate supply curve, which of the following is most likely to occur if the Fed pursues restrictive monetary policy, ceteris paribus? The other five are presidents of the federal reserve district banks (there are 12 total). Federal Reserve Board announces results from second round of bank stress tests will be released Friday, December 18, at 4:30 p.m. EST Press Release - … Given an upward-sloping aggregate supply curve, which of the following is most likely to occur if the Fed sells bonds in the open market, ceteris paribus? Ceteris paribus, which of the following will occur if the Fed buys bonds through open-market operations? If the Federal Reserve wanted to stimulate the economy, it would most likely: A. reduce the discount rate. If the Fed wants to stimulate aggregate demand it should _____ bonds to _____ the money supply. he Federal Reserve System's responsibilities include: conducting monetary policy; supervising and regulating financial institutions; providing services to depository institutions, the federal government… As the money supply increases, interest rates _______ and aggregate demand shifts to the _______. Which of the following will cause a decrease in aggregate demand? The different shapes of the aggregate supply curve: The equilibrium output will increase but the price level will stay the same until full employment is reached. Which of the following is not true about excess reserves? A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. The discount rate is the interest rate charged by: The rate of interest banks charge each other for lending reserves is the: Which of the following lends reserves to private banks? e. seven members nominated by the President and confirmed by the Senate. A. The shape of the _____ curve determines the impact of an aggregate demand shift on prices and output. Keynesians believe a change in the money supply cannot lower the unemployment rate. The Federal Reserve System Purposes & Functions 23 The Federal Reserve’s Monetary Policy Mandate and Why It Matters The Federal Reserve was created by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and finan-cial system. consists of seven members appointed by the President of the United States, who together act as the key decision-making entity for monetary policy. All of the above are tools of monetary policy. Ceteris paribus, if the reserve requirement is decreased to 0.07, then excess reserves will increase by: The Federal Reserve when it lends money to private banks. The chairman and vice-chairman are appointed to four-year terms and may be reappointed subject to term li… The Federal Reserve banks clear checks between private banks, hold bank reserves, provide currency for banks, and make loans to private banks. Both banks issued currency, made commercial loans, accepted deposits, purchased securities, maintained multiple branches and acted as fiscal agents for the U.S. Treasury. Congress and the president are the key decision makers for U.S. monetary policy. When the Fed sells bonds, the quantity of reserves in the banking system declines and the money supply decreases. The Federal Reserve System performs five functions to promote the effective operation of the U.S. economy and, more generally, to serve the public interest. Are the minimum amount of reserves a bank is required to hold. Ceteris paribus, if the reserve requirement is increased to 0.25, then excess reserves will: Suppose the banks in the Federal Reserve System have $1 billion in transactions accounts and the reserve requirement is 0.10. By buying bonds, the Fed decreases the quantity of reserves in the banking system and decreases the money supply. Question: Which Of The Following Are Responsibilities Of The Federal Reserve? The Federal Reserve is responsible for overseeing all depository institutions. Ceteris paribus, if the Fed reduces the reserve requirement, then: Is the reciprocal of the required reserve ratio. C. unit of account. The twelve regional Federal Reserve banks are responsible for: The Baltimore bank's regional Federal Reserve bank. Serves a four-year term and can be reappointed. With an upward-sloping aggregate supply curve, tight monetary policy: Which of the following policies supports the concept of continual adjustment of the money supply to achieve macroeconomic goals? They are equal to the required reserve ratio times transactions deposits. He deposits the check in his account at his Baltimore bank. Which of the following is true about the chairman of the Federal Reserve Board of Governors? Ceteris paribus, if the reserve requirement is increased to 0.20, then excess reserves will: Suppose the banks in the Federal Reserve System have $100 million in transactions accounts and the reserve requirement is 0.10. Which of the following policies is supported by the idea that producers and workers will demand higher prices and wages when they see the money supply expanding? The Federal Reserve Board of Governors has: The Board of Governors has ___ members, and they are appointed for ___ year terms. C. control the monetary base. Act As A Bank For Banks, Both Accepting Deposits And Extending Loans. group of 12 Federal Reserve Bank presidents only. Which of the following best describes the eclectic aggregate supply curve? The purchase of bonds in the open market by the Fed. If the Fed wants to reduce bank reserves, it can: Total quantity of output demanded at alternative price levels. The Federal Reserve is the central bank of the United States; it serves as a banking institution for commercial banks to use and a way for the government to influence financial activity. C. The New York Federal Reserve district contains many of the largest commercial banks in the United States. E. B. set the discount rate. How many members are on the Federal Reserve board of governors? Given an upward-sloping aggregate supply curve, attempts to reduce unemployment through monetary policy will aggravate current inflation as illustrated by a: The equilibrium price level and output will both decrease. b. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress. Changes in the discount rate. A. Providing banking and fiscal services to the federal government. Which of the following is the Fed trying to accomplish as a result of this action? Summary Carter cannot be blamed for the double-digit inflation that peaked on his watch, because inflation started growing in 1965 and snowballed for the next 15 years. If the Fed wishes to decrease the money supply it can: The policy lever most commonly used by the Fed is: A. Decrease and the aggregate demand curve will shift to the right. The primary responsibilities of the Federal Reserve Board are the formulation and conduct of monetary policy and the supervision and regulation of banks. Combines elements of the monetarist and Keynesian assumptions about the shape of aggregate supply. Which of the following will occur if the Fed raises the reserve requirement, ceteris paribus? D. mint bills and coins. Open-market operations are the tool used least frequently by the Fed to alter the reserves of the banking system. 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