Economics Chapter 16 Flashcards
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is a term that refers to paper money
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Currency
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Metallic forms of money, called ______, are produced by the Bureau of the Mint
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Coins
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A commercial bank that owns stock in the Fed is called a(n)_______ bank.
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Member
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Bank_____ companies own and control one or more banks
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Holdings
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The Fed is led by a seven-member ________ who are appointed by the president and approved by the senate.
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Board of Governers
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the U.S. Bureau of engraving and printing
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Which agency manufactures U.S. paper money?
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It is distributed by banks, which get it from the Fed
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How does new money enter into circulation in the United States?
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it has the power to raise and lower interest rates.
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Why is the Federal Open Market Committee considered the Fed's primary monetary policy-making body
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Private national banks are required to purchase shares in the Fed.
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Which of these ensures that the U.S. government does not own the Fed?
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40%
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Approximately what percent of all U.S. banks are members of the Fed?
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FALSE
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The Fractional Reserve system is unique to the United States.
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TRUE
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Monetary policy concerns itself with the cost and availability of credit.
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FALSE
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The discount rate is the interest rate charged by the Fed for loans to individuals.
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FALSE
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"Easy money policy" is a method of tightening credit and discouraging investment.
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TRUE
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Open market operations involve the sale of government securities in financial markets.
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They keep a portion as legal reserves and loan out a portion at interest
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What do Fed member banks doe with customer deposits?
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A contraction of the money supply is associated with higher interest rates
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Which of these describes a general connection between the money supply and interest rates?
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the prime rates
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Which of these interest rates is set by individual banks?
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They tend to be unsuccessful
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Which of the best describes the effectiveness of wage-price controls on inflation?
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the reserve requirement, open market operations, and the discount rate
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What are the Fed's three main tools for conducting monetary policy?
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Technique for encouraging member banks to take on more loans
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Quantitative easing
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fiscal policies that do not require direct government action to execute
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passive fiscal policies
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fiscal policies that require direct government action to execute
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discretionary fiscal policies
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people born in the United States from 1946 to 1964
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Baby boomers
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three-member economic advisory group
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Council of Economic Advisers
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ideology
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Which off these names a non-economic factor that can block formation of effective economic policy?
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Troubled Asset Relief Program
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Which program, sponsored by President George W. Bush and passed by Congress, Bailed out banks in the Great Recession?
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demand-side economics
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Which of these was a reaction to unemployment and other problems during the Great Depression?
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The Fed purchased large amounts of risky securities from private banks
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Which of these strategies was employed by the Fed for the first time during the Great Recession?
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tax cuts
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Which of these is an example of discretionary fiscal measure?
