Macroeconomics ch.14 – Flashcards
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The value of money varies
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inversely with the price level
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The Federal Reserve System was created in
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1913
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As it relates to Federal Reserve activities, the acronym FOMC describes the
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Federal Open Market Committee
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The Federal Open Market Committee (FOMC) is made up of
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the seven members of the Board of Governors of the Federal Reserve System along with the president
of the New York Federal Reserve Bank and four other Federal Reserve Banks presidents on a rotating
basis
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The group that sets the Federal Reserve Systems policy on buying and selling government securities
(bills, notes, and bonds) is the
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Federal Open Market Committee (FOMC)
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The members of the Federal Reserve Board
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are appointed for 14-year terms
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An important routine function of the Federal Reserve Bank is to
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provide facilities by which commercial banks and thrift institutions may collect checks
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To say that the Federal Reserve Banks are quasi-public banks means that
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they are privately owned, but managed in the public interest
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The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 in
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commercial banks and thrift institutions
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Which of the following is the most important economic policy function of the Federal Reserve Banks
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acting as fiscal agents for the Federal government
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In the United States, the money supply (M1) is comprised of
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coins, paper currency, and checkable deposits
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Checkable deposits are classified as money because
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they can be readily used in purchasing goods and paying debts
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In defining money as M1, economists exclude time deposits (savings deposits) because
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they are not directly or immediately a medium of exchange
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The money supply is backed
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by the government's ability to control the supply of money and therefore to keep its value relatively
stable
