07. Decisions by the Federal Reserve Bank a) must be approved by the President and Congress. b) become effective only if executed by the President. c) do not require anyone's approval. d) are sometimes overturned by the Supreme Court. O e) must be approved by the Advisory Board made up of representatives of member banks.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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**Question 7**

07. Decisions by the Federal Reserve Bank
- a) must be approved by the President and Congress.
- b) become effective only if executed by the President.
- c) do not require anyone's approval.
- d) are sometimes overturned by the Supreme Court.
- e) must be approved by the Advisory Board made up of representatives of member banks.

---

**Question 8**

08. To be considered money, an asset has to
- a) be printed by the government.
- b) be the legal tender.
- c) be issued by the central bank.
- d) be backed by gold.
- e) serve as the medium of exchange.

---

**Question 9**

09. When a private bank is faced with a reserve shortfall,
- □ a) it can borrow reserves from other banks or sell their more liquid assets such as mortgage and commercial loans.
- □ b) Legally, it has only days to shore-up its reserve position.
- □ c) is likely to address the problem by just halting its lending and waiting for their existing loans to be repaid.
- □ d) it will most likely sell its real estate holdings and call-in their mortgages.
Transcribed Image Text:**Question 7** 07. Decisions by the Federal Reserve Bank - a) must be approved by the President and Congress. - b) become effective only if executed by the President. - c) do not require anyone's approval. - d) are sometimes overturned by the Supreme Court. - e) must be approved by the Advisory Board made up of representatives of member banks. --- **Question 8** 08. To be considered money, an asset has to - a) be printed by the government. - b) be the legal tender. - c) be issued by the central bank. - d) be backed by gold. - e) serve as the medium of exchange. --- **Question 9** 09. When a private bank is faced with a reserve shortfall, - □ a) it can borrow reserves from other banks or sell their more liquid assets such as mortgage and commercial loans. - □ b) Legally, it has only days to shore-up its reserve position. - □ c) is likely to address the problem by just halting its lending and waiting for their existing loans to be repaid. - □ d) it will most likely sell its real estate holdings and call-in their mortgages.
Expert Solution
Step 1: Define central bank
“Since you have asked multiple questions, we will answer the first question for you. If you want any specific question to be solved, then please specify the question number or post only that question.”

This can be described as the central authority of the banking system of that particular nation. The main responsibility of this bank is to maintain stability in the economy especially in the level of prices of commodities and services by increasing or decreasing of the supply of money by using different tools according to the situation

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