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Devry FIN 364 Week 2 Homework Latest
- 1.Question : (TCO 2) The asset of Federal Reserve banks associated with open market operations is
Federal Reserve notes.
U.S. government securities.
loans to member banks.
float.
Question 2. Question : (TCO 2) Federal Reserve notes held in bank vaults are the liability or obligation of
the Fed.
the Treasury.
the bank.
None of the above
Question 3. Question : (TCO 2) When the New York Fed sells Treasury securities to a securities dealer,
the depository institutions deposits in the Fed decrease.
the depository institutions deposits in the Fed increase.
the deposit balance of the security dealer in its bank decreases.
both depository institutions deposits in the Fed decrease and the deposit balance of the security dealer in its bank decreases above.
Question 4. Question : (TCO 2) The purchase of government securities by the Fed will
decrease the money supply.
increase security prices.
increase interest rates.
decrease credit availability.
Question 5. Question : (TCO 2) The Federal Reserve System established
a system for federal chartering of banks.
a system for controlling bank note issuance.
a source of liquidity for the banking system.
the beginning of demand deposit accounts.
Question 6. Question : (TCO 2) The Fed’s most visible monetary tool is probably
open market operations.
change in reserve requirements.
Reg Z.
discount rate policy.
Question 7. Question : (TCO 2) Reserve requirements apply to
national banks.
state banks.
savings-and-loan associations.
All of the above
Question 8. Question : (TCO 2) Using this data, answer the question below:
Total Reserves $90,000,000
Reserve Requirement 5%
Total Deposits $700,000,000
What is the level of excess reserves?
$ 5,000,000
$ 55,000,000
$ 70,000,000
Not ascertainable
Question 9. Question : (TCO 3) The monetary base will decrease when
banks withdraw currency from the Fed.
the Fed makes loans at the discount window.
the Fed sells securities on the open market.
the Fed buys securities on the open market.
Question 10. Question : (TCO 3) An increase in the assets of Federal Reserve banks will
decrease the monetary base.
increase the monetary base.
has no effect on monetary base.
always decrease another Federal Reserve Bank asset.
Question 11. Question : (TCO 3) An increase in excess reserves will cause
the Fed Funds rate to rise.
planned inventory investment to fall.
depository institutions to lend more freely.
foreign investors to buy more T-Bills.
Question 12. Question : (TCO 3) Consumption spending should increase if
financial wealth decreases.
reserve requirements decrease.
interest rates increase.
credit availability decreases.
Question 13. Question : (TCO 3) If the money supply increases too rapidly then
inflationary expectations will rise.
government spending will decrease.
bank lending will decrease.
investment spending will fall.
Question 14. Question : (TCO 3) Monetary policy probably affects all of the following except
housing investment.
consumer durable investment.
inventory investment.
federal government budget outlays.
Question 15. Question : (TCO 3) Which of the following is not a channel of transmission of monetary policy?
Reg Q interest rate ceilings
Consumer spending for durable goods and housing
Net exports
Business investment in real assets
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