Macro Chapter 11 DSM

The interest rate charged on very short-term interbank loans is called the __________.

federal funds rate

Money that has value due to government decree is known as __________ money.

fiat

Any token that is generally accepted as a means of payment is known as __________.

money

Credit cards are:

not part of the money supply.

The Fed conducts monetary policy primarily through:

open market operations.

The Federal Reserve System is __________.

the central bank of the United States

The actions the Federal Reserve takes to manage the money supply and interest rates in order to pursue economic objectives are called __________.

Monetary policy

When we say that money serves as a unit of account, we mean that:

Prices are quoted in terms of money.

The Board of Governors of the Federal Reserve has _________ members that are appointed for staggered _________ by the __________ and confirmed by the Senate.

Seven, 14-year terms, President

Which body of the Federal Reserve System sets U.S. monetary policy?

The Federal Open Market Committee

Who is the chairperson of the Federal Open Market Committee (FOMC)?

The chairperson of the Board of Governors.

How many Federal Reserve districts are there?

12

The sum of all currency held by individuals and businesses, traveler's checks, and checkable deposits owned by individuals and businesses is equal to

M1

A money multiplier equal to 5 means that:

a dollar change in the monetary base leads to a five dollar change in the quantity of money.

To increase the quantity of money, the Fed

buys U.S. Treasury securities.

Electronic cash, or e-cash, is an electronic currency but it is not money because __________.

it is not universally accepted as payment

The largest asset on commercial banks' balance sheets is __________.

loans

The financial crisis of 2008 led the Fed to engage in large scale open market bond purchases known as __________.

quantitative easing

The name given to the fraction of deposits that a bank is legally required to hold in its vault, or as deposits at the Fed, is __________.

required reserves

If the Federal Reserve wanted to decrease the quantity of money it could __________.

sell bonds on the open market

Which of these is a financial institution that accepts deposits considered to be part of the nation's money supply?

Money market fund

The largest liability on commercial banks' balance sheets is __________.

deposits

When banks have __________ reserves they can create money by making new loans.

excess