FIN 364 DeVry Week 2 Homework

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FIN 364 DeVry Week 2 Homework

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FIN 364 DeVry Week 2 Homework

FIN364

FIN 364 DeVry Week 2 Homework

FIN 364 DeVry Week 2 Homework

  1. Question : (TCO 2)The asset of Federal Reserve banks associated with open market operations is
  • Federal Reserve notes.
  • U.S. government securities.
  • loans to member banks.
  • float.

Question 2. Question : (TCO 2) Federal Reserve notes held in bank vaults are the liability or obligation of

  • the Fed.
  • the Treasury.
  • the bank.
  • None of the above

Question 3. Question : (TCO 2) When the New York Fed sells Treasury securities to a securities dealer,

  • the depository institutions deposits in the Fed decrease.
  • the depository institutions deposits in the Fed increase.
  • the deposit balance of the security dealer in its bank decreases.
  • both depository institutions deposits in the Fed decrease and the deposit balance of the security dealer in its bank decreases above.

Question 4. Question : (TCO 2) The purchase of government securities by the Fed will

  • decrease the money supply.
  • increase security prices.
  • increase interest rates.
  • decrease credit availability.

Question 5. Question : (TCO 2) The Federal Reserve System established

  • a system for federal chartering of banks.
  • a system for controlling bank note issuance.
  • a source of liquidity for the banking system.
  • the beginning of demand deposit accounts.

Question 6. Question : (TCO 2) The Fed’s most visible monetary tool is probably

  • open market operations.
  • change in reserve requirements.
  • Reg Z.
  • discount rate policy.

Question 7. Question : (TCO 2) Reserve requirements apply to

  • national banks.
  • state banks.
  • savings-and-loan associations.
  • All of the above

Question 8. Question : (TCO 2) Using this data, answer the question below:

Total Reserves $90,000,000

Reserve Requirement 5%

Total Deposits $700,000,000

What is the level of excess reserves?

  • $ 5,000,000
  • $ 55,000,000
  • $ 70,000,000
  • Not ascertainable

Question 9. Question : (TCO 3) The monetary base will decrease when

  • banks withdraw currency from the Fed.
  • the Fed makes loans at the discount window.
  • the Fed sells securities on the open market.
  • the Fed buys securities on the open market.

Question 10. Question : (TCO 3) An increase in the assets of Federal Reserve banks will

  • decrease the monetary base.
  • increase the monetary base.
  • has no effect on monetary base.
  • always decrease another Federal Reserve Bank asset.

Question 11. Question : (TCO 3) An increase in excess reserves will cause

  • the Fed Funds rate to rise.
  • planned inventory investment to fall.
  • depository institutions to lend more freely.
  • foreign investors to buy more T-Bills.

Question 12. Question : (TCO 3) Consumption spending should increase if

  • financial wealth decreases.
  • reserve requirements decrease.
  • interest rates increase.
  • credit availability decreases.

Question 13. Question : (TCO 3) If the money supply increases too rapidly then

  • inflationary expectations will rise.
  • government spending will decrease.
  • bank lending will decrease.
  • investment spending will fall.

Question 14. Question : (TCO 3) Monetary policy probably affects all of the following except

  • housing investment.
  • consumer durable investment.
  • inventory investment.
  • federal government budget outlays.

Question 15. Question : (TCO 3) Which of the following is not a channel of transmission of monetary policy?

  • Reg Q interest rate ceilings
  • Consumer spending for durable goods and housing
  • Net exports
  • Business investment in real assets