FINC 409 - Ch. 4

During the 2008-2015 period, the Fed engaged in how many rounds of quantitative easing?

3

Approximately what percentage of commercial banks in the United States are members of the Fed?

33%

What is an essential requirement of a well-operating financial system?

An efficient national payments system. b. An elastic or flexible money supply that can respond to changes in the demand for money. c. A lending/borrowing mechanism to help alleviate liquidity problems when they arise. (All of the choices are correct)

Which of the following central banks has been in existence the longest?

Bank of England

Who served as the chair of the Fed BOG immediately prior to Janet Yellen?

Ben Bernake

Which of the following central banking systems operates similarly to the U.S. system of one central bank and 12 district banks?

European Central Bank

What is the Federal National Mortgage Association known as?

Fannie Mae

Which of the following organizations was created to issue its own debt securities to obtain funds that are invested in mortgages made to low-income to moderate-income home purchasers?

Government National Mortgage Association

Which of the following is true of the Federal Reserve System?

It is the central bank of the United States, It is responsible for setting monetary policy, It is responsible for regulating the banking system. (All of the choices are correct.)

Which is true of the Consumer Credit Protection Act?

It requires clear explanation of consumer credit costs, It requires clear explanation of garnishment procedures, It prohibits overly high-priced credit transactions. (All of the choices are correct)

On-site examination of commercial banks is shared by the Fed and which of the following?

Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, State regulatory agencies (all choices are correct)

Which of the following is considered to be the most important services function provided by the Reserve Banks?

Payments mechanism for transferring money

Although the Fed is authorized to examine all member banks, in practice it limits itself to examining which of the following?

State-chartered member banks and all bank holding companies

Which of the following countries has a central banking system that is made up of a series of regional central banks rather than a single central bank?

United States

Excess reserves occur in which of the following situations?

bank reserves are greater than required reserves

By which method can checks in the U.S. banking system be cleared?

directly between banks, through a bank clearinghouse, Federal Reserve Bank (all choices are correct)

Which of the following is not a basic policy instrument of the Fed?

implementing monetary easing programs

Which is generally true in countries where central banks are relatively independent from their governments?

lower inflation rates and higher economic growth rates

Where on a check is the "routing number" shown?

lower left corner

The Fed discount rate is currently measured by which rate?

primary credit rate

What is the national banking system prior to the establishment of the Fed considered to be deficient in?

transferring money, creating money, maintaining adequate bank liquidity (all choices are correct)

What is the number of Federal Reserve Banks in the U.S. Federal Reserve System is?

twelve