1) Americans" are afraid of central power and also their mistrust of moneyed interests define why the U.S. Go not have a central bank till the

A) 17th century.

You are watching: The theory of bureaucratic behavior suggests that the objective of a bureaucracy is to maximize

B) 18th century.

C) 19th century.

D) 20th century.


2) financial institution panics in 1819, 1837, 1857, 1873, 1884, 1893, and also 1907 persuaded many that

A) the commonwealth Reserve required greater manage over the banking system.

B) the federal Reserve needed greater authority to attend to problem banks.

C) a central bank was needed to avoid future jae won panics.

D) both A and also B that the above.


3) The unusual structure of the federal Reserve device is perhaps ideal explained by

A) Americans" fear of central power.

B) the traditional American mistrust of moneyed interests.

C) Americans" desire to remove control of the money it is provided from the U.S. Treasury.

D) all of the above.

E) only A and B that the above.


4) The traditional American mistrust of moneyed interests and the are afraid of central power aid to explain

A) the failure of the very first two experiment in main banking in the unified States.

B) the decentralized framework of the commonwealth Reserve System.

C) why the board of Governors that the commonwealth Reserve system is not located in new York.

D) every one of the above.


5) The financial panic of 1907 led to such widespread bank failures and comprehensive losses to depositors the the American publicly finally came to be convinced that

A) the first Bank the the united States had failed to offer as a lender of critical resort.

B) the second Bank the the joined States had actually failed to serve as a lender of critical resort.

C) the commonwealth Reserve System had actually failed to serve as a lender of last resort.

D) a central bank was necessary to prevent future panics.


6) Nationwide jae won panics in 1873, 1884, 1893, and also 1907 can have been avoided had

A) the very first Bank the the United claims served that is intended role of lender of critical resort.

B) the second Bank the the United states not to be abolished in 1836 by president Andrew Jackson.

C) the 2nd Bank that the United states served that intended duty of lender of critical resort.

D) the federal Reserve offered its intended role of lender of critical resort.


7) The many local Federal Reserve financial institutions resulted native a compromise in between parties favoring

A) the facility of a main bank and also those opposed to that is establishment.

B) a private main bank and those donate a government institution.

C) the facility of the plank of Governors in Washington, D.C., and also those like its facility in new York City.

D) none of the above.


8) i m sorry of the following is an facet of the federal Reserve System?

A) The commonwealth Reserve banks

B) The plank of Governors

C) The FDIC

D) all of the above

E) just A and B the the above


9) which of the complying with is an facet of the federal Reserve System?

A) The commonwealth Reserve banks

B) The plank of Governors

C) The FOMC

D) every one of the above


10) i beg your pardon of the adhering to is not an reality of the commonwealth Reserve System?

A) commonwealth Reserve banks

B) The FDIC

C) The board of Governors

D) The commonwealth Advisory Council

E) Member commercial banks


11) i m sorry of the following features are no performed by any of the twelve regional Federal reserve banks?

A) examine clearing

B) Conducting financial research

C) setting interest rates payable top top time deposits

D) Issuing new currency


12) Which federal Reserve bank president always has a poll in the commonwealth Open industry Committee?

A) Philadelphia

B) brand-new York

C) Boston

D) mountain Francisco


13) every Fed financial institution president attends FOMC meetings; although just ________ Fed financial institution presidents poll on policy, all ________ administer input.

A) three; ten

B) five; ten

C) three; twelve

D) five; twelve


14) The ________ Fed bank, with around 25 percent of the system"s assets, is the most necessary of the commonwealth Reserve banks.

A) Chicago

B) Los Angeles

C) Miami

D) brand-new York

E) Washington, D.C.


15) Member commercial banks have purchased share in their district Fed banks; the dividend paid by that stock is restricted to

A) 4 percent annually.

B) 5 percent annually.

C) 6 percent annually.

D) eight percent annually.


16) all ________ are compelled to be members that the Fed.

A) state-chartered banks

B) nationally chartered banks

C) financial institutions with an ext than $100 million in assets

D) banks with more than $500 million in assets


17) i m sorry of the following financial institutions are forced to be members the the commonwealth Reserve System?

A) state-chartered banks

B) insured banks

C) banks having end $500 million in assets

D) no one of the above


18) Of all commercial banks, around ________ percent belong come the federal Reserve System.

A) 15

B) 20

C) 30

D) 50


19) financial institutions subject to reserve requirements collection by the commonwealth Reserve device include

A) just state-chartered banks.

B) only nationally hired banks.

C) only banks with less than $100 million in assets.

D) only banks with less than $500 million in assets.

E) all banks whether or no they are members that the federal Reserve System.


20) The Fed"s assistance of the Depository institutions Deregulation and also Monetary regulate Act that 1980 stemmed in part from its

A) worry over decreasing Fed membership.

B) id that all banking regulations need to be eliminated.

C) id that interest price ceilings were too low.

D) belief that depositors had to become more knowledgeable about banking operations.


21) which of the following are duties that the board of Governors that the federal Reserve System?

A) setup margin requirements, the portion of the acquisition price that securities that needs to be paid for v cash.

B) setting the preferably interest prices payable top top certain species of time store under Regulation Q.

C) regulating credit with the approval of the chairman under the Credit manage Act the 1969.

D) no one of the over has to be a duty of the Board because the mid-1980s.


A) setup margin requirements, the portion of the purchase price the securities that has to be paid for v cash.

22) i beg your pardon of the adhering to are no duties that the board of Governors that the federal Reserve System?

A) setup margin requirements, the fraction of the acquisition price the securities that needs to be payment for through cash.

B) setting the best interest prices payable top top certain species of time store under Regulation Q.

C) providing the discount rate "established" through the commonwealth Reserve banks.

D) Representing the United says in negotiation with international governments on economic matters.


23) The chairman the the plank of Governors of the commonwealth Reserve mechanism exercises a high level of control over the board

A) with his capability to collection the agenda the the Board and the FOMC.

B) through his function as spokesperson for the Fed through the President and also before Congress.

C) since he have the right to veto decisions made through a bulk of the other Board members.

D) due to the fact that of all of the above.

E) due to the fact that of just A and B of the above.


24) Members that the board of Governors are

A) chosen by the federal Reserve bank presidents.

B) appointed by the newly elected president that the unified States, as room cabinet positions.

C) appointed by the chairman of the joined States and also confirmed through the Senate as members resign.

D) never enabled to serve an ext than seven-year terms.


25) every member that the seven-member board of Governors is appointed by the president and confirmed through the Senate to serve

A) 4-year terms.

B) 6-year terms.

C) 14-year terms.

D) as lengthy as the appointing president continues to be in office.


26) The board of Governors

A) establishes, in ~ limits, make reservation requirements.

B) efficiently sets the discount rate.

C) set margin requirements.

D) does all of the above.

E) does only A and also B that the above.


27) Although no ________ nor the ________ is officially set by the commonwealth Open sector Committee, decisions concerning these policy tools are successfully made through the committee.

A) margin requirements; discount rate

B) margin requirements; federal funds rate

C) reserve requirements; discount rate

D) make reservation requirements; federal funds rate


28) although the federal Open industry Committee walk not have actually formal authority to collection ________ and the ________, the does own the authority in practice.

A) margin requirements; discount rate

B) margin requirements; commonwealth funds rate

C) make reservation requirements; discount rate

D) reserve requirements; federal funds rate


29) i m sorry of the following are true statements?

A) The FOMC typically meets every 6 weeks to collection monetary policy.

B) The FOMC issues directives come the trading desk at the brand-new York Fed.

C) designers of the commonwealth Reserve plot did no envision the use of open sector operations as a financial policy tool.

D) all of the over are true statements.

E) only A and B that the above are true statements.


30) The federal Open sector Committee is composed of

A) the five senior members of the seven-member plank of Governors.

B) the seven members of the plank of Governors and also seven presidents the the regional Fed banks.

C) the seven members of the plank of Governors and five presidents the the local Fed banks.

D) the twelve local Fed financial institution presidents and also the chairman that the board of Governors.


31) The federal Reserve entity that determines financial policy strategy is the

A) plank of Governors.

B) federal Open market Committee.

C) Chairman that the plank of Governors.

D) shadow Open industry Committee.


32) i beg your pardon of the following are true statements?

A) The FOMC usually meets every six weeks to collection monetary policy.

B) The FOMC problems directives to the trading desk at the new York Fed.

C) developers of the commonwealth Reserve act did no envision the use of discount lending together a financial policy tool.

D) every one of the over are true statements.

E) just A and B that the above are true statements.


33) The designers of the commonwealth Reserve Act meant to develop a central bank characterized by its

A) mechanism of checks and balances and also decentralization the power.

B) strong concentration of strength in the hand of a few people.

C) i can not qualify to function as a lender of critical resort.

D) responsiveness come the electorate.


34) The strength within the federal Reserve was effectively transferred come the plank of Governors by

A) the banking regulation of the good Depression.

B) can be fried Court decisions in the 1950s.

C) the Depository establishments Deregulation and Monetary manage Act that 1980.

D) the Treasury-Federal to make reservation Accord of 1951.


35) components that administer the commonwealth Reserve v a high level of self-reliance include

A) 14-year terms for members the the board of Governors.

B) a four-year term because that the chairman of the plank of Governors that is not coincident through the president"s hatchet of office.

C) constitutional independence from Congress and also the president.

D) every one of the above.

E) just A and also B the the above

36) federal Reserve self-reliance is thought to

A) present a short-term bias to financial policymaking.

B) lead to better fiscal and also monetary plan coordination.

C) present longer-run considerations to financial policymaking.

D) do both A and B the the above.


37) Members that Congress are able to affect monetary policy, albeit indirectly, v their ability to

A) withhold appropriations indigenous the board of Governors.

B) withhold appropriations native the commonwealth Open industry Committee.

C) propose law that would force the Fed to submit spending plan requests to Congress, as should other federal government agencies.

D) do all of the above.


C) propose legislation that would pressure the Fed come submit budget plan requests to Congress, as have to other federal government agencies.

38) Although that enjoys a high degree of autonomy, the Fed is still topic to the affect of conference because

A) Congress deserve to pass legislation that would restrict the Fed"s independence.

B) Congress can withhold the Fed"s budget plan requests.

C) Congress can remove members of the plank of Governors who views on plan differ native those of an essential members of Congress.

D) all of the above.


39) according to the textbook authors, the Fed is

A) remarkably cost-free of the political pressures that influence other government agencies.

B) an ext responsive come the politics pressures that influence other federal government agencies.

C) most likely somewhat constrained in that is policymaking by the congressional danger to alleviate Fed independence.

D) both A and also C that the above.


40) follow to the textbook authors,

A) the Fed appears to be remarkably cost-free of the political pressures that affect other federal government agencies.

B) because the chairman can defend the Fed from Congress, the Fed might be responsive to the president"s policy preferences.

C) the Fed shows up to be more responsive to the politics pressures that influence other federal government agencies.

D) both A and also B the the above.


41) The oldest main bank, founded in 1694, is the

A) bank of England.

B) Deutsche Bundesbank.

C) financial institution of Japan.

D) federal Reserve System.


42) The newest main bank, which began operations in January 1999, is the

A) European main Bank.

B) financial institution of Argentina.

C) financial institution of Korea.

D) financial institution of brand-new Zealand.


43) i beg your pardon of the following main banks has actually the greatest level of independence?

A) financial institution of England

B) European main Bank

C) financial institution of Japan

D) federal Reserve System


44) A tendency in recent years is that much more and much more governments

A) have been approving greater freedom to their central banks.

B) have been reduce the freedom of their main banks to make them much more accountable for bad economic performance.

C) have actually mandated the their main banks offer up lot of policy goals to emphasis strictly top top inflation.

D) have compelled their central banks to coordinate plans with their ministers of finance.


45) The concept of governmental behavior says that the objective of a bureaucracy is come maximize

A) the public"s welfare.

B) its very own welfare.

C) profits.

D) conflict in between the executive and also legislative branches of government.


46) The concept of administrative behavior suggests that the federal Reserve will

A) try to avoid a dispute with the president and Congress over increases in interest rates.

B) shot to get regulatory power over more banks.

C) devise clever techniques in an effort to protect against blame for bad economic performance.

D) do all of the above.


47) according to the theory of governmental behavior, the target of administration is

A) come maximize its own welfare, definition that the seeks extr power and prestige.

B) come maximize consumers" surplus, meaning that the seeks extr regulatory powers.

C) to defend the market it regulates, an interpretation that that seeks additional regulatory powers.

D) none of the above

48) follow to the concept of bureaucratic behavior,

A) the objective of a bureaucracy is to maximize its very own welfare, an interpretation that the seeks added power and prestige.

B) the administration will fight vigorously to maintain its autonomy; thus, it will attempt come avoid conflict with the president and also Congress.

C) the administration will support regulation that provides it added regulatory power.

D) all of the over describe governmental behavior.


49) The theory of bureaucratic behavior when applied to the Fed helps to define why the Fed

A) resists so strongly congressional make the efforts to limit the central bank"s autonomy.

B) is secretive about the command of future financial policy.

C) sought less control over financial institutions in the 1980s.

D) all of the above.

E) just A and also B the the above.


50) The theory of bureaucratic actions when applied to the Fed help to describe why the Fed

A) is donate of congressional attempts to limit the central bank"s autonomy.

B) is secretive about the conduct of future financial policy.

C) search less control over banks in the 1980s.

D) is willing to take it on powerful groups that may threaten its autonomy.


51) The strongest dispute for an independent commonwealth Reserve rests ~ above the see that subjecting the Fed to more political pressures would certainly impart

A) one inflationary prejudice to monetary policy.

B) a deflationary predisposition to monetary policy.

C) a disinflationary bias to financial policy.

D) a countercyclical predisposition to financial policy.


52) politicians in a democratic society may it is in shortsighted because of your desire to success reelection; thus, the political process can

A) send an inflationary prejudice to financial policy.

B) send a deflationary predisposition to monetary policy.

C) create a political business cycle in which, just prior to an election, expansionary plans are sought to lower unemployment and interest rates.

D) reason both A and C that the above to occur.


53) The case for commonwealth Reserve independence contains the idea that

A) political push would send an inflationary bias to financial policy.

B) a politically insulated Fed would be much more concerned with long-run objectives and also thus it is in a defender of a sound dollar and a steady price level.

C) a commonwealth Reserve under the regulate of congress or the president could make the so-called political service cycle an ext pronounced.

D) every one of the above.


54) The situation for commonwealth Reserve independence includes the idea that

A) a politics insulated Fed would certainly be more concerned v long-run objectives and also thus be a defender the a sound dollar and also a steady price level.

B) a commonwealth Reserve under the regulate of conference or the president could make the so-called political organization cycle more pronounced.

C) the principal-agent problem is probably worse because that the Fed than for congressmen because the former does no answer come the voters on election day.

D) only A and also B that the above
D) just A and also B that the above

55) The situation for federal Reserve independence does not encompass the idea that

A) political pressure would impart an inflationary prejudice to monetary policy.

B) a politics insulated Fed would certainly be more concerned through long-run objectives and thus be a defender of a sound dollar and a stable price level.

C) plan is always performed far better by an elite group such together the Fed.

D) a federal Reserve under the manage of conference or the president can make the so-called political business cycle more pronounced.


C) policy is constantly performed better by one elite group such as the Fed.

56) The case for commonwealth Reserve self-reliance does not encompass the idea that

A) political pressure would send an inflationary prejudice to financial policy.

B) the principal-agent difficulty is probably worse because that the Fed 보다 for congressmen due to the fact that the previous does no answer to the voters on choice day.

C) a politically insulated Fed would certainly be more concerned v long-run objectives and also thus be a defender the a sound dollar and also a stable price level.

D) a commonwealth Reserve under the regulate of conference or the president can make the so-called political business cycle much more pronounced.


B) the principal-agent trouble is possibly worse because that the Fed than for congressmen since the previous does not answer come the voters on election day.

57) proponents of Fed independence are afraid that subjecting the Fed to straight presidential or congressional control would

A) impart an inflationary prejudice to monetary policy.

B) force monetary authorities come sacrifice the long-run objective of price stability.

C) make the so-called political business cycle even an ext pronounced.

D) do every one of the above.

E) do only A and also B of the above.


D) do all of the above.

58) proponents of Fed independence fear that subjecting the Fed to direct presidential or congressional control would

A) impart an inflationary prejudice to monetary policy.

B) force monetary authorities to sacrifice the long-run objective of price stability.

C) make the so-called political business cycle much less pronounced.

D) do all of the above.

E) do just A and B the the above.


E) do only A and also B the the above.

59) supporters of the current system of Fed independence believe that a less autonomous Fed would

A) take on a long-run bias toward policymaking.

B) seek overly expansionary financial policies.

C) be much more likely to create a political service cycle.

D) do only B and also C the the above.


D) do just B and C that the above.

60) critics of the current system of Fed independence contend that

A) the present system is undemocratic.

B) voters have too lot say around monetary policy.

C) the president has too much regulate over monetary policy ~ above a day-to-day basis.

D) all of the above are true.


A) the current system is undemocratic.

61) doubters of Fed self-reliance argue

A) that it is undemocratic to have monetary policy managed by an elite group responsible come no one.

B) the an independent Fed conducts financial policy with a constant inflationary bias.

C) that the Fed, due to the fact that it does not challenge a binding budget constraint, security too much of that is earnings.

D) just A and also B of the above.


A) that it is undemocratic to have monetary policy managed by one elite team responsible to no one.

62) critics of Fed self-reliance argue

A) that it is undemocratic to have actually monetary policy regulated by an elite team responsible to no one.

B) that independence seemingly does small to guarantee great monetary policy.

C) the its self-reliance may encourage the Fed to go after a course of small self-interest fairly than the public interest.

D) all of the above.


D) every one of the above.

63) instrument independence means the main bank is cost-free from

A) political pressure concerning how it uses the tools of monetary policy.

B) politics pressure concerning the purposes it pursues.

C) both A and also B that the above.

D) neither A no one B the the above.


A) political pressure about how it offers the devices of monetary policy.

64) Suppose legislation requiring the Fed to keep the inflation rate between 1.5% and also 2.5% every year is pass by Congress. This law restricts the Fed"s

A) instrument independence.

B) score independence.

C) both A and also B the the above.

D) no A no one B the the above.


B) score independence.

65) Cross-country evidence argues that boost in central bank independence results in a ________ inflation rate and ________ unemployment.

A) lower; higher

B) lower; no worse

C) higher; lower

D) higher; higher


B) lower; no worse

66) The board of Governors that the commonwealth Reserve device

A) appoint 3 directors come each federal Reserve Bank.

B) elect 6 members come member advertisement banks.

C) both of the above.

D) no one of the above.


A) appoint three directors to each commonwealth Reserve Bank.

67) The commonwealth Advisory Council has actually ________ member(s) from every district.

A) one

B) two

C) three

D) can have any number of


A) one

68) The three biggest Federal Reserve financial institutions in regards to assets are those of brand-new York, Chicago, and

A) Atlanta.

B) Los Angeles.

C) Baltimore.

D) mountain Francisco.


D) mountain Francisco.

69) The director of a district financial institution are classified into three categories: A, B, and also C. The 3 B director are

A) skilled bankers.

B) prominent leaders indigenous industry, labor, agriculture, or the consumer sector.

C) elected by the plank of governors to stand for the public interest.

D) every one of the above.


B) influential leaders indigenous industry, labor, agriculture, or the customer sector.

70) The 12 federal Reserve financial institutions are involved in monetary policy in number of ways:

A) your directors establish the discount rate.

B) they decision which financial institutions can acquire discount loans from the federal Reserve Bank.

C) your directors pick one advertising banker from each bank"s district to offer on the federal Advisory Council.

D) all of the above.


D) all of the above.

71) The ________ that the board of Governors is the spokesperson because that the Fed.

A) chairman

B) president

C) either of the over can be the spokesperson

D) neither of the above


A) chairman

72) Currently, there room ________ countries that room members that the European financial Union.

A) 10

B) 12

C) 15

D) 20


B) 12

73) In November 2007, the Fed announced major enhancements come its interaction strategy. Which of the complying with was a part of the changes?

A) The estimate horizon because that the FOMC"s projections was expanded from two calendar year to three.

B) The committee publishes FOMC projections 4 times a year rather of twice a year.

C) The relax would incorporate a rigid of the pressures shaping the outlook and risks to that outlook.

D) every one of the above were suggest changes.


D) all of the over were propose changes.

1) The unusual structure of the commonwealth Reserve system is ideal explained by Americans" are afraid of centralized power.


True

2) rapid money it is provided growth and also uncontrollable inflation were among the components which urged the production of the federal Reserve System.


False

3) The Washington, D.C. Fed bank, v over 30 percent of the system"s assets, is the most important Federal make reservation Bank.


False
4) The FOMC is an facet of the federal Reserve System.
true

5) every nationally chartered banks are required to it is in members the the Fed.


True

6) every member of the seven-member board is appointed by the president and confirmed by the Senate to serve 14-year terms.


True

7) The plank of Governors to adjust reserve requirements.


True

8) monetary policy is set by the plank of Governors.


False

9) federal Reserve monetary policy decisions need to be authorized by the Secretary that the Treasury before they might be implemented.


False

10) The FOMC problems directives to the trading workdesk at the new York Fed.


True
11) critics of the current system that Fed independence contend that the president has actually too much manage over monetary policy on a day-to-day basis.
False

12) nations with much more independent main banks have lower inflation rates, however these have come at the price of better output fluctuations.


False

13) Announcing the FOMC"s policy decision instantly after the FOMC meeting is an example of how Fed policymaking has become much more transparent.


True

14) The Fed has actually goal independence yet not tool independence.

See more: Trivia / No More Heroes Kill Or Be Killed, It'S Kill Or Be Killed Mix


False

15) The commonwealth Reserve financial institutions act together liaisons in between the business community and also the commonwealth Reserve System.


True

16) The FOMC does not actually lug out securities to buy or sales.


True

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