Question

1.The Federal Reserve System is responsible to

A. regulate securities exchanges.
B. conduct monetary policy.
C. provide payment and other services to certain types of financial institutions.
D. setting bank prime rates.
E. both B and C.

2.         Which of the following does the Federal Reserve Banks do in regard to bank supervision?

I. Examinations of state-chartered member banks
II. Approval of member bank and bank holding company acquisitions
III. Provide deposit insurance

A. I only
B. I and II only
C. II and III only
D. I and III only
E. I, II, and III

3.         The Fed uses as its primary policy tool to meet its monetary policy goals:

A. changing the discount rate.
B. changing reserve requirements.
C. devaluing the currency.
D. changing bank regulations.
E. open market operations.

4.         If the Fed is targeting interest rates and money demand increases, an appropriate policy response is to

A. increase the discount rate.
B. increase reserve requirements.
C. buy U.S. Treasury securities from government bond dealers.
D. increase government spending.
E. none of the above.

5.         The _______________ is a network jointly operated by the Fed and private financial institutions that electronically process credit and debit transfers of funds.

A. Fedwire
B. ACH
C. CHIPS
D. NASDAQ
E. SWIFT

Answer 1

Q - 1

The correct answer is option (E) both B and C

The Federal Reserve System is responsible to conduct monetary policy and provide payment and other services to certain types of financial institutions. These are the main responsibilities entrusted upon the Federal Reserve system.

Q - 2

The correct answer is option B. I and II only

Federal Reserve Banks undertake examinations of state-chartered member banks and approve the member bank and bank holding company acquisitions.

Q - 3

The correct answer is option E. open market operations.

Open market option is the primary tool vide which Fed achieves its monetary policy goals

Q - 4

The correct answer is option C. buy U.S. Treasury securities from government bond dealers.

This is the part of the open market operations that Fed undertakes to achieve its monetary policy goals.

Q - 5

The correct answer is option B. ACH