econ test 3

When the Fed lends to depository institutions, the loans are called A) federal funds. B) discount loans. C) repurchase agreements. D) reverse repurchase agreements.

discount loans

the primary assets of the fed are

discount loans and government securities

which of the following is an asset of the fed?

discount loans to banks

what is the most direct method the fed uses to change the monetary base

open market operations

the percentage of deposits that banks must hold as reserves is called the

required reserve ration

in august 2016, the largest liability of the fed was

reserves

which of the following is a liability of the fed

reserves

open market operations generally involve

the Fed buying and selling U.S. government securities.

as of august 2016, the value of currency in circulation was about

1.4 trillion

If the Fed buys securities worth $10 million, then

A) bank reserves will increase by $10 million.

Vault cash is a(an)

A) liability of the Fed and is counted as reserves.

Reserves equal

deposits with the Fed plus vault cash.

the feds portfolio of securities consists principally of

U.S treasury obligations

if the fed purchases securities worth $10 million from a commercial bank, the banking systems balance sheet will show

a decrease in securities held of $10 million and an increase in bank reserves of $10 million

the monetary base is equal to

all currency in circulation plus reserves held by banks

reserve deposits are

assets for financial institutions, but liabilities for the Fed

As of August 2016, which of the following was TRUE?

bank reserves>currency in circulation> deposits of foreign government and international organizations

which of the following is a liability of the fed?

currency in circulation

when the fed extends loans to depository institutions

it increases the level of reserves

the interest rate the fed charges on loans to depository institutions is known as

the discount rate

the paper currency of the united states is issued by

the fed

the difference between currency outstanding and current in circulation is equal to

vault cash

If the Fed purchases $1 million in securities from the nonbank public, the monetary base will rise by $1 million

whether the public holds the proceeds as currency or deposits them as checkable deposits