MONEY AND BANKIN1.docx

MONEY AND BANKING (DAVIDSSON)
FINAL EXAM QUESTIONS

Theoogovernmentooinstitutionoothatoohasooresponsibilityooforootheooamountooofoomoneyooa
ndoocreditoosuppliedooinootheooeconomyooasooaoowholeooisootheoo_____.

A)oomonetaryoofund
B)oocommercialoobank
C)oobankooofoosettlement
D)oocentraloobankoo-ooans--✔✔centraloobank

WhatoomakesootheooFederalooReserveoosooouniqueoocomparedootooootheroocentraloobank
sooaroundootheooworldooisooitsoo_____.

A)oocentralizedoostructure
B)oomonetaryoopolicyoofunctions
C)ooregulatoryoofunctions
D)oodecentralizedoostructureoo-ooans--✔✔decentralizedoostructure

WhichooofootheoofollowingooisooanooentityooofootheooFederalooReserveooSystem?

A)ooTheooFDICoo(FederalooDepositooInsuranceooCorporation)
B)ooTheooU.S.ooTreasuryooSecretary
C)ooTheooFOMCoo(FederalooOpenooMarketooCommittee)
D)ooTheooComptrollerooofootheooCurrencyoo-ooans--
✔✔theooFOMCoo(FederalooOpenooMarketooCommittee)

AnooimportantoofunctionooofootheooregionalooFederalooReserveooBankooisoo_____.

A)oosettingooreserveoorequirements
B)oosettingoomarginoorequirements
C)oodeterminingoomonetaryoopolicy
D)ooclearingoochecksoo-ooans--✔✔clearingoochecks

Thereooareoo_____oomembersooofootheooBoardooofooGovernorsooofootheooFederalooReser
veooSystem.

A)oo5
B)oo7
C)oo12
D)oo19oo-ooans--✔✔7

,MembersooofootheooBoardooofooGovernorsooareoo_____.

A)ooappointedoobyootheoopresidentooofootheooUnitedooStatesooandooconfirmedoobyootheooS
enate
B)oochosenoobyootheooFederalooReserveooBankoopresidents
C)ooappointedoobyootheoonewlyooelectedoopresidentooofootheooUnitedooStates,ooasooareooc
abinetoopositions
D)ooneverooallowedootoooserveoomoreoothanoo7-yearootermsoo-ooans--
✔✔appointedoobyootheoopresidentooofootheooUnitedooStatesooandooconfirmedoobyootheooS
enate

Whileootheoodiscountoorateooisoo"established"oobyooregionalooFederalooReserveooBanks,oo
inootruth,ootheoorateooisoodeterminedoobyoo_____.

A)ooCongress
B)ootheooBoardooofooGovernors
C)ootheooSenate
D)ootheoopresidentooofootheooUSoo-ooans--✔✔theooBoardooofooGovernors

TheooFederalooOpenooMarketooCommitteeooconsistsooofootheoo_____.

A)oofiveoosenioroomembersooofootheoosevenoomemberooBoardooofooGovernors
B)ootwelveooregionalooFedoobankoopresidentsooandootheoochairmanooofootheooBoardooofoo
Governors
C)oosevenoomembersooofootheooBoardooofooGovernorsooandoosevenoopresidentsooofootheo
oregionalooFedoobanks
D)oosevenoomembersooofootheooBoardooofooGovernorsooandoofiveoopresidentsooofootheoore
gionalooFedoobanksoo-ooans--
✔✔sevenoomembersooofootheooBoardooofooGovernorsooandoofiveoopresidentsooofootheoore
gionalooFedoobanks

TheoomemberoobanksooownootheooFederalooReserveooBankooinootheirooownoodistrict.ooHo
wooisoothatooaccomplished?

A)oononeooofootheooaboveooisoocorrect
B)oobyoofederaloolegislationoostatingooso
C)oobyoorequiringootheoobanksooinootheooregionootooobuyoostockooinootheirooregionalooFede
ralooReserveooBank
D)oobyoostateoolegislationoostatingoosooo-ooans--
✔✔byoorequiringootheoobanksooinootheooregionootooobuyoostockooinootheirooregionalooFeder
alooReserveooBank

TheoopresidentoofromoowhichooFederalooReserveooBankooalwaysoohasooaoovoteooinootheoo
FederalooOpenooMarketooCommittee?

, A)ooNewooYork
B)ooBoston
C)ooSanooFrancisco
D)ooPhiladelphiaoo-ooans--✔✔NewooYork

TheooFedooisooableootooobeooindependentoofromootheoopoliticalooprocessoo(i.e.ootheooFedoo
isooableootooosetoomonetaryoopolicyoogoalsoonotooinfluencedoobyootheoopoliticalooprocess)o
obecauseoo_____.


A)ooitooisoonotoofinancedoobyootheoofederaloogovernmentoobudgetoo(doesoonotoogetooanyoo
moneyoofromootheoogovernmentoobudget)
B)oootheroofederaloogovernmentooinstitutionsoodon'tootryootoooinfluenceootheooFED
C)ooonlyooindependentoopersonsoocanoobecomeoogovernorsooofootheooFED
D)oononeooofootheooaboveooisoocorrectoo-ooans--
✔✔itooisoonotoofinancedoobyootheoofederaloogovernmentoobudgetoo(doesoonotoogetooanyoo
moneyoofromootheoogovernmentoobudget)

Theoogovernmentooagencyoothatoooverseesootheoobankingoosystemooandooisooresponsible
ooforootheooconductooofoomonetaryoopolicyooinootheooUnitedooStatesooisoo_____.


A)ootheooUSooGoldooCommission
B)ootheooUnitedooStatesooTreasury
C)ootheooFederalooReserveooSystem
D)ootheooHouseooofooRepresentativesoo-ooans--✔✔theooFederalooReserveooSystem

Individualsoothatoolendoofundsootoooaoobankoobyooopeningooaoocheckingooaccountooareooc
alledoo_____.

A)oopolicyholders
B)oodenyooholders
C)oopartners
D)oodepositorsoo-ooans--✔✔depositors

Theoothreeooplayersooinootheoomoneyoosupplyooprocessooincludeoo_____.

A)oobanks,oodepositors,ooandooborrowers
B)oobanks,ooborrowers,ooandootheoocentraloobank
C)oobanks,oodepositors,ooandootheooUSooTreasury
D)oobanks,oodepositors,ooandootheoocentraloobankoo-ooans--
✔✔banks,oodepositors,ooandootheoocentraloobank

Theoomonetaryoobaseooconsistsooofoo_____.

A)oocurrencyooinoocirculationooandooreserves
B)oocurrencyooinoocirculationooandooFederalooReserveoonotes
C)ooreservesooandooFederalooReserveooNotes