CH 4 FIN460

unpredictable; rarely

Because the effect of changes in the reserve requirement on bank deposits is _________, the Federal Reserve _________ uses this mechanism for monetary policy.

capital injections into the banking system. asset purchases or guarantees. debt guarantees. the expansion of retail deposit insurance.

Four of the programs implemented by central banks to alleviate the effects of the Financial Crises were

increase; decrease

Raising domestic interest rates can cause the dollar's foreign exchange rate to ________, resulting in a(n) ________ in U.S. exports.

reserve requirements; discount rates

The Federal Reserve Board also sets bank ________ and reviews and approves the ________ set by the 12 Federal Reserve Banks.

money supply; interest rate

The Federal Reserve Board, acting through the Federal Open Market Committee, sets _______ and _______ targets.

community affairs offices

The _________ at the Federal Reserve Banks engage in a variety of activities to help the public understand and address issues that affect low and moderate income people and regions.

U.S. Congress; Federal Reserve Banks

The _________ creates federal laws intended to protect consumers in financial transactions, and the ___________ implement those laws.

open market operations.

The purchase and sale of U.S. government securities by the trading desk at the New York Fed under the direction of the FOMC is called

True

True or false: During the Financial Crisis, coordinated effort by the central banks of 11 major countries accounted for the bulk of the economic rescue programs.

False

True or false: Reserve requirements are an easy and common way for the Federal Reserve to control the money supply.

use open market operations to sell Treasury bills. increase reserve requirements. raise the discount rate.

When the Federal Reserve wants to slow down the economy, it can