Federal funds A. provide banks with an immediate infusion of reserves. B. are short-term funds transferred between financial institutions, usually for a period of one day. C. actually have nothing to do with the federal government. D. are all of the above..

Federal funds A. provide banks with an immediate infusion of reserves. B. are short-term funds transferred between financial institutions, usually for a period of one day. C. actually have nothing to do with the federal government. D. are all of the above..

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter13: The Federal Reserve System

Section: Chapter Questions

Problem 6WNG

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Concept explainers

Financial Institutions and Federal Bank

The word financial institution is a kind of business organization that deals with the financial activities of a nation. These activities include accepting deposits, making payments, granting loans and advances, transferring funds, holding shares, providing credits, purchasing and selling foreign exchanges, investments in shares, futures commodities, and many more.

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Federal funds

A. provide banks with an immediate infusion of reserves.

B. are short-term funds transferred between financial institutions, usually for a period of one day.

C. actually have nothing to do with the federal government.

D. are all of the above..

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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.
Which of the following is NOT true about the FederalReserve?a. It was established by the U.S. Constitution.b. It regulates the banking system.c. It lends to banks.d. It conducts open-market operations.
If there is a recession, the Fed would most likely encourage banks to provide loans by: a. buying government securities b. raising the discount rate c. raising the required reserve ratio d. raising the federal funds rate e. selling government securities
Federal funds are A) created as banks to lend out money. B) any funds printed by the federal government. C)private bank deposits at the Federal Reserve (Fed). C) Fed deposits at private banks. D) government agency deposits at the Fed.
Is the Federal Reserve Bank important to our economy? Choose a side and support your argument with 2 reasons. Be thorough. 1 paragraph.
Define: Central Bank act as a lender of the last resort. How?
If the Required Reserve Ratio is 0.10, what does the Fed need to do to contract the supply of money by $40 billion? Select one: a. Buy $2 billion worth of government bonds from banks b. Buy $4 billion worth of government bonds from banks c. Buy $8 billion worth of government bonds from banks d. Sell $4 billion worth of government bonds to banks e. Sell $2 billion worth of government bonds to banks f. Sell $8 billion worth of government bonds to banks
If the Fed decreases the federal funds rate and/or the discount rate, the money supply does what? A. It increases. B. It decreases. C. It remains unchanged as the federal funds rate has no impact on the money supply.
In the United States, the Federal Reserve sets the reserve requirement, which banks must meet through deposits at the Federal Reserve district banks and cash held at the bank. What does this requirement achieve? Check all that apply. a. It ensures that banks cannot hoard money by holding too many reserves. b. It means that a bank must have one dollar of deposits for every dollar it lends out. c. It helps to prevent bank runs by reassuring the public that banks will not make too many loans and run out of cash. d. It helps to facilitate transfers of funds between banks when a customer from one bank writes a check to a customer of another bank.
I'd like help on b,c,d
25. The Fed has in recent years set monetary policy by choosing a target for the federal funds rate, a short-term interest rate at which banks make loans to one another. This statement is a. true b. false c. There is not enough information to answer the question.
The Fed uses open market operations to :Select one .a. determine the required reserve ratio .b. determine the discount rate .c. buy or sell government securities .d. determine the federal funds rate