1. The primary purpose of a central bank is to control a nation’s:___________. 2. The Fed’s largest single liability is the: _ asset not related to monetary ____________ .___________. 3. A Fed asset not related to monetary policy is ___________________________. 4. The Federal Reserve controls ___________________. 1. The FOMC or _____________has __________ members.
Monetary Policy and Equation of Exchange
The monetary policy has been defined as the policy that is used by the Federal Reserve (the central bank of the US) or the central bank (the central bank of India is RBI) along with the use of the supply of money to accomplish certain macroeconomic policies. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.
Monetary Economics
As from the name, it is very evident that monetary economics deals with the monetary theory of economics. Therefore, we can say that monetary economics, is that part of economics that provides us with the idea or notion of analyzing money as a holding with its function, which acts as the medium of exchange, the store of value through which the buying and selling are done and also the unit of account. It also helps in formulating the framework of the monetary policy of a bank in an economy which ultimately results in the welfare of the people residing in that particular economy. The monetary policy of an economy also helps to analyze and evaluate the financial health of it.
1. The primary purpose of a central bank is to control a nation’s:___________.
2. The Fed’s largest single liability is the: _ asset not related to monetary ____________ .___________.
3. A Fed asset not related to
4. The Federal Reserve controls ___________________.
1. The FOMC or _____________has __________ members.
2. The document by which the FOMC instructs the trading desk is called a ______________.
3. Among U.S. commercial banks, all __________banks are members of the Federal Reserve System while some ____________banks are members.
4. Total
1. There are __________federal reserve banks.
2. Borrowing from the Fed is called “___________________ “.
3. A Fed asset not related to monetary policy is _________________________.
4. The document by which the FOMC instructs the trading desk is called a
1. Which of the following powers or tools of the Fed impacts the monetary base most significantly?
a. discount rate
b. Reg Q
c. open market operations
d. Bank examination
2. The monetary base excludes which Fed balance sheet items?
a. U.S. Treasury securities
b. “Agency” securities”
c. “DACI”
d. all of the above
3. M2 includes:
a. currency in circulation
b. demand deposits
c. both of the above
d. none of the above
4. Which of the following is not a channel of transmission of monetary policy?
a. Reg Q interest rate ceilings
b. consumer spending for durable goods and housing
c. net exports
d. business investment in real assets
1. “Easing” monetary policy would have what impact on the value of the dollar against other currencies?
a. increase
b. decrease
c no effect
d. none of the above
2. M2 includes:
a. currency in circulation
b. demand deposits
c. both of the above
d. none of the above
3. Which of the following powers or tools of the Fed impacts the monetary base most significantly?
a. discount rate
b. Reg Q
c. open market operations
d. Bank examination
4. Which of the following is not a channel of transmission of monetary policy?
a. Reg Q interest rate ceilings
b. consumer spending for durable goods and housing
c. net exports
d. business investment in real assets
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