question

The U.S. Treasury is primarily responsible for:

answer

debt management

question

Examples of automatic stabilizers are:

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unemployment insurance

question

Automatic stabilizers include all of the following except:

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social security

question

Almost all Treasury disbursements are made by:

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Checks drawn against deposits at Federal Reserve Banks

question

When the U.S. Treasury makes a payment to an individual or business, it usually takes the form of

answer

Check drawn on a Federal Reserve Bank

question

The budget-making process is carried out by:

answer

Congress The president

question

Budgetary deficits always have the effect of:

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creating governmental competition for private investment funds

question

U.S. debt management, which is an important function of the Treasury, is generally designed to:

answer

encourage orderly economic growth and stability

question

A high level of inflation:

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discourages investment by increasing the uncertainty about future returns

question

The federal government pays for the services it provides primarily through:

answer

taxation

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Federal reserve open market operations, setting reserve requirement, and lending to depository institutions are:

answer

all designed to have their effect by influencing the reserves of depository institutions

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Open market operations differ from discounting operations in that they are:

answer

initiated by the Federal Reserve

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Various programs of the federal government help stabilize disposable income, and in turn, economic activity in general. in so doing:

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some programs act on a continuing basis and are described as automatic stabilizers

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continuing federal government programs that stabilize economic activity are called

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automatic stabilizers

question

currently, the backing for Federal Reserve notes is primarily in the form of:

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none of the above

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Debt management of the federal government includes:

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-determining which types of refunding to implement -determining the types of securities to sell -deciding which interest rate patterns to use

question

Debt management includes all of the following except:

answer

the required reserves ratio

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Under required reserves of 20%, the maximum to which the money supply could be expanded by the banking is:

answer

four times a new primary deposit

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one factor that decreases the volume of bank reserves is a decrease in:

answer

Federal Reserve float

question

one factor that decreases the volume of bank reserves in a(n):

answer

increase in the public's demand for currency to be held outside the banking system

question

Bank reserves are increased when the treasury:

answer

decreases its holding of cash

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Which one of the following transactions or operations is entirely at the initiative of the Federal reserve?

answer

Open market operations

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The monetary base:

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consists of bank reserves, plus currency held by the public

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Changes in the growth rates of money supply and money velocity affect the growth rate in:

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-real economic activity -the rate of inflation

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if a check is written for the full amount of a derivative deposit created by a bank loan and then is sent to a bank in another city

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the lending bank would lose all of its excess reserves

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Total reserves in the banking system consists of:

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-vault cash held at commercial banks and other depository institutions -reserve deposits eld ad Federal Reserve banks

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when a customer demands additional currency by cashing a check for $500. all of the following occur except:

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Federal Reserves notes decrease

question

Bank reserves are not affected by:

answer

-all of the above affect bank reserves

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in our financial system, the money multiplier

answer

can fluctuate over time

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The U.S. banking system has the ability to alter the size of the money supply because of the use of:

answer

a fractional reserve system

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which of the following statements is most correct?

answer

derivative deposits occur when reserves created from primary deposits are made available through bank loans to borrowers who leave them on deposit in order to write checks against the funds

question

which of the following statements is most correct?

answer

the money multiplier is influenced by the public's switching between checkable and non checkable deposits at their banks

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which of the following statements is false?

answer

all of the above statements are correct

question

which of the following statements is false?

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the ability to alter the money supply and credit is based on the fact that our banking system does not utilize a fractional reserve system

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the money supply (M1) is equal to the monetary base

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multiplied by the money multiplier

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total bank reserves do not include which of the following?

answer

deficits reserves

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the government entity responsible for fiscal policy is:

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-the congress -the president

question

government financing of large budgetary deficits:

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may crowd out private borrowers

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the deposit of a check drawn on the Fed that adds new reserves to the bank where it is deposited and to the banking system is called a:

answer

primary deposit

question

transactions that affect bank reserves can be initiated by the

answer

all the above

question

a country's economic policy actions are directed toward all of the following EXCEPT:

answer

balance in the federal budget

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Groups of policy makers that are actively involved in achieving U.S economic policy objectives include all of the following EXCEPT:

answer

all of the above are policy makers

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The percentage of deposits that must be held as reserves is called

answer

Required reserve ratio

question

the "perfect financial storm" that developed in 2008, which put the U.S. economy was on the verge of collapse was characterized by all of the following EXCEPT:

answer

all of the above were factors

question

During the 2007-2009 financial crisis, many major financial institutions and business corporations were on the verge of collapse or failure; however, some of the very largest corporations and financial institutions were deemed as being______ because their failure would cause cascading negative repercussions throughout the U.S and many foreign economies.

answer

too big to fail

question

During the 2007-2009 financial crisis, some of the very largest financial institutions were deemed as being "too big to fail" because their failure would cause cascading negative repercussions throughout the U.S and many foreign economies. As a result, the Federal Reserve

answer

-moved to increase liquidity in the monetary system and reduced its target federal funds rate to below .25 percent -worked with the U.S Treasury to help facilitate the merging of financially weak institutions with institutions that were financially stronger

question

During the 207-2009 financial crisis, _____and_____, who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008

answer

Fannie mae and freddie mac

question

in the fall 2008, the U.S. congress and president George W. Bush responded to the financial crisis with the passage of the _____in early October of that year

answer

economic stabilization act

question

a primary focus of the economic stabilization act of 2008. which became known as the _____, was to allow the U.S treasury purchase up to $700 billion of troubled or toxic assets held by financial institutions

answer

Troubled Asset Relief Program (TARP)

question

in an effort to stimulate economic activity, Congress and the president passed the $787 billion ___________ in February, 2009 with the funds to be used to provide tax relief, appropriations, and direct spending.

answer

American Recovery and Reinvestment Act of 2009

question

As the decade of the 2000s came to a close, the unemployment rate remained at the 10 percent level and continued at high level resulting in the Fed engaging in_________.

answer

Quantitative Easing

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