The Federal Reserve was created to: O increase employment in the United States. establish a banking system in the United States. O provide stability in the banking sector and the economy. correct deflation in the United States.

19... Acquiring information on a bank's activities in order to determine a bank's risk is difficult for depositors and is another argument for government   Question 19 options:   a)  ownership.   b)  forbearance.   c)  regulation.   d)  recall.

Before October 2008, if the Fed were to increase the discount rate so that it was much higher than the federal funds rate, eventually reserves would have decreased and the money supply would have decreased. O reserves would have increased and the money supply would have increased. reserves would have decreased and the money supply would have increased. O reserves would have increased and the money supply would have decreased.

The federal funds rate  A. equals the discount rate. B. only matters to banks and has very little impact on individual consumers. C. is set by the Federal Reserve Bank. D. is the rate that banks charge each other for short-term loans of excess reserves.

The federal funds rate is:   Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.   a   the interest rate that the Federal Reserve charges banks when banks borrow reserves from the Federal Reserve.   b   the market interest rate that banks pay each other when they borrow reserves from each other.   c   the interest rate the the Federal Reserve pays on banks' required reserves.   d   the interest rate that the Federal Reserve pays on banks' excess reserves.

The Federal Reserve a. was created in 1896. b. is part of the executive branch of government. c. is the central bank of the United States. d. is only responsible for controlling the money supply.

Page 4 5. Use the following T-account information and the fact that the required reserve ratio in this economy is 0.10 (i.c., 10 %) to answer the questions below (Show your work) Treasury dd T 20 Bonds 600 Bonds Loans to Fed 300 dd 190 B dd 100 T 20 Banks FRN 200 Public 1500 Loans from Banks 850 Banks Cash 60 dd p 1500 dd p P dd B 190 Other Cash 150 Loans to Deposits 100 Bonds 100 Public 850 Loans from Other Bonds 100 Fed 100 Deposits 100 a. What are the Bank Reserves? b. What are the Bank Required Reserves? c. What are the Bank Excess Reserves? d. What is the current Money Supply (MI)? e. If Banks maximized their Loans to the Public, using up all their excess reserves, what will be the new Money Supply? f. The Fed did not like the new Money Supply and sold 40 in Bonds to Banks. After the banks bought the bonds, they have to call in loans from the public. What will be the new Money Supply end up being after the banks made the required changes? g. If the Banks refused the buy the 40 in…

If a society chooses fiat money as its money form, it __________.Group of answer choices A. will need to make sure the currency is convertible into gold B. must make sure there is an illiquid money supply C. should estimate any central bank D. must be particularly vigilant about controlling the quantity of money

The table shows the commercial banks' balance sheet (aggregated over all the banks). The commercial banks' desired reserve ratio on all deposits is 10 percent and there is no currency drain. Calculate the bank's excess reserves. >>> Answer to 2 decimal places. Assets Reserves at the Fed Cash in vault Securities Loans The banks' excess reserves are $☐ million. Liabilities (millions of dollars) 2535 20 Checkable deposits 15 Savings deposits 40 95

Question 3 If the Federal Reserve wants to increase the money supply, it can O increase the reserve ratio, allowing banks to loan more money to customers. O reduce the reserve ratio, allowing banks to loan more money to customers. sell bonds on the open market to banks, allowing them to loan less money to customers. O increase the reserve ratio, making it harder for banks to loan money to customers. Question 4 DELL C