Answered: The Federal Reserve O sets interest…

The Federal Reserve O sets interest rates is the U.S. central bank controls the amount of money in the economy all of the above O none of the above

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

The Federal Reserve
O sets interest rates
is the U.S. central bank
controls the amount of money in the economy
all of the above
none of the above

Expert Solution

Step 1

The Federal Reserve is the central bank ofthe United Nation. They conduct national monetary policy of the US in order to promote price stability, maximum employment, and long term interest rate. It also controls the amount of money in the economy.

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With respect to controlling the money supply,the law requires the Fed to take orders froma. the president.b. the Speaker of the House.c. the Secretary of the Treasury.d. no one—the Fed is an independent agency.
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Which of the following represents an action by the central bank designed to decrease the money supply? Select one: a. a decrease in the required reserve ratio O b. buying government securities an increase in the discount rate C. d. a increase in tax rates
In the United States control of the money supply is given to: a. The President b. The Federal Reserve System c. The Bureau of Printing and Engraving d. The Department of the Treasury
What happens when there is an increase in market interest rates? The money multiplier decreases. The opportunity cost of a bank holding reserves increases. Banks will offer fewer loans because they are too expensive to grant. O The Federal Reserve increases reserve requirements.
What is the role of the Fed and the FOMC in the U.S. economy? A. The Fed is the world's central bank, and the FOMC is composed of the Fed chairman and the President of the United States. B. The Fed provides banking services to banks and governments, and the FOMC meets every six weeks to review the state of the economy. C. The Fed implements policy dictated by the White House, and the FOMC is its management committee. D. The Fed is the central bank of the United States, and the FOMC is a committee of the New York Fed.
The major monetary policy making arm of the Federal Reserve is the A. Office of the Comptroller of the Currency B. Federal Reserve Bank of New York C. none of them D. Board of Governors
if the fed raise the reserve requirment on deposit from 15% to 20%, what would happen to the money supply? a. it would increase b. it would remain unchanged c, it depends on the value of interest rates d, it would decrease
Which of the following are the four influences on the demand for money? (Check all that apply) A. Money Supply B. Inflation C. Income D. Interest Rates E. Credit Availability
What effect would the discovery of gold that fuels inflation have on the money market? Illustrate with a diagram
Which of the following is NOT a function of the Fed? Offering checking accounts to the U.S. public O Regulating the money supply in the economy Acting as the federal government's banker O Providing a system of check collection and clearing for depository institutions