Question

QUESTION 1

1. After Monetary policy has two objectives:

   		to ensure that sufficient money and credit are available to meet the needs of the economy and to minimize fluctuations—recessions and inflationary booms—around a long-term trend.
   		to reduce the costs of government deficit spending and keep interest rates low.
   		to ensure full employment and low interest rates.
   		none of the options

7.18 points   

QUESTION 2

1. FOMC stands for the

   		Federal Ongoing Management Council.
   		Federal Open Market Committee.
   		Federal Operations Membership Committee.
   		Federal Open Management Committee.

7.14 points   

QUESTION 3

1. Fed is The Fed engaging in __________ when it lends to commercial banks during emergencies to avoid insolvency

   		Lender of last resort
   		fiscal policy
   		monetary policy
   		open market operations

7.14 points   

QUESTION 4

1. Open market operations is the buying and selling of government securities.

   True

   False

7.14 points   

QUESTION 5

1. The Fed's main policy tool to regulate the money supply is

   		engaging in open market operations
   		changing the discount rate.
   		None of the options
   		changing the required reserve ratio

7.14 points   

QUESTION 6

1. The Federal Open Market Committee (FOMC)

   		is the principal policy-making body of the Federal Reserve
   		All of the options are correct.
   		consists of 12 members.
   		formulates monetary policy and oversees its implementation.

7.14 points   

QUESTION 7

1. The __________ is the rate banks are charged to borrow reserves from the Fed

   		required reserve ratio
   		fed fund rate
   		discount rate
   		None of the options

7.14 points   

QUESTION 8

1. The discount rate is

   		the interest rate the Fed charges to depository institutions that borrow reserves from the Fed.
   		the interest rate the Fed charges to large businesses that borrow from the Fed.
   		the interest rate the Fed charges to consumers that borrow from the Fed.
   		The interest rate banks charge each other

7.14 points   

QUESTION 9

1. The Fed Fund rate is the interest rates bank charge each other to borrow funds.

   True

   False

7.14 points   

QUESTION 10

1. The full term of a member of the Board of Governors of the Fed is

   		11 years
   		14 years
   		7 years
   		2 years

7.14 points   

QUESTION 11

1. If the Fed wants to increase the supply of money, it _____________.

   		Raise the reserve requirement ratio
   		sell treasury bonds
   		Buy Treasury Bonds
   		Raise the discount rate

7.14 points   

QUESTION 12

1. An increase in the money supply will cause investment to __________ and consumption to __________.

   		increase; increase
   		increase; decrease
   		decrease; decrease
   		decrease; increase

7.14 points   

QUESTION 13

1. Which of the following is considered a tight monetary policy?

   		none of the options are correct
   		open market purchased of bonds by the Fed
   		Increase the reserve requirement
   		decrease in the discount rate

7.14 points   

QUESTION 14

1. The Federal Open Market Committee is responsible for _____________.

   		maintaining competition among the nation’s banks
   		implementing monetary policy
   		establishing the official price of gold
   		defining the foreign exchange value

Answer 1

Q1)the objective of monetary policy is to ensure proper funds available with in the economy and to minimise fluctuations and recessions...

Answer .A

Q2)FOMC standsstafor federal open market committe.

B

Q3)fed acts as a lender of last resort for the need of commercial bank

A

Q4)yes,the given statement is true...

A)true

Q5)fed regulates money supply by buying and selling government securities which is termed as open market operations

Answer...A)changing open market operations

Q6)all the options are correct

B

Q7)federal discount rate is the rate that fed chargescbanks for lending loans to them...

C

Q8)discount rate is the rate that fed charges when it tends amounts to banksor institutions

A

Q9)fed find rate is the rate that bank charges from other bank

A...true

Q10)the term of members being fourteen years

Answer B)14years

Q11)it will buyb treasury bonds,as money will goes to banks or to economy...

C

Q12)decrease,increaee

Q13)increase in reserve requirement

Q14)FOMC is responsible for implementing monetary policy .....

Answer...B....