money and banking
Which of the following is part of M1?
checkable bank deposits
The Federal Reserve's main liabilities are:
currency and bank reserves
Among the liabilities of banks are:
customers' deposits
When banks borrow from and lend reserves to each other, they are participating in the _____ market.
federal funds
A reserve ratio is the:
fraction of deposits that the bank is required to hold as reserves
The tool of monetary policy with which the Federal Reserve buys and sells government bonds is called:
open-market operations
If it looks as if a bank won't meet the Federal Reserve Bank's reserve requirement, normally it will first turn to the:
other member banks borrow money at the federal funds rate
The Federal Reserve System is the _____ for the United States.
central bank
Currency in circulation is cash: I. held by the public. II. in the vaults of commercial banks. III. in the vault of the Federal Reserve.
I only
In the financial crisis of 2008, which of the following firms failed?
Lehman Brothers, an investment bank
The Federal Reserve's main assets are:
U.S. Treasury bills
A share of stock is considered:
an asset for the owner of stock
A bond is considered:
an asset for the owner of the bond that is not part of the money supply
The discount rate is the interest rate the Federal Reserve charges on loans to:
banks
The federal funds rate is the interest rate at which:
banks borrow from other banks with excess reserves
If the Federal Reserve wants to discourage banks from borrowing directly from the Federal Reserve and thus decrease the monetary base, it will likely:
increase the discount rate
Among the assets of a bank are:
loans
The monetary base is the sum of:
reserves held by the banks and currency in circulation
Reserve requirements:
set the minimum amount of reserves a bank must hold
In return for injecting capital into banks, the U.S. government received:
shares of stock in the bank
Bank reserves are:
the currency held at bank vaults plus bank deposits at the Federal Reserve.
