Question 1

The ECB's Governing Council has price stability as a primary objective. It has defined price stability as:

Accepted Answer

A)   a zero rate of inflation.
B)   an inflation rate less than 5 percent.
C)   an inflation rate below, but close to, 2 percent over the medium term.
D)   an inflation rate in the three to five percent range.E) A) and C)
F) A) and B)

Question 2

How is accountability achieved for the Federal Reserve and is it clear?

Accepted Answer

The Congress of the United States has se...

Question 3

A large step toward independence occurred for the Fed in 1935 when the:

Accepted Answer

A)   Fed went from two to twelve districts.
B)   Secretary of the Treasury and the Comptroller of the Currency were removed from the Board of Governors.
C)   Chairman of the Board of Governors was no longer a cabinet position.
D)   Fed was given the ability to control its own budget.E) All of the above
F) B) and C)

Question 4

The largest of the regional Federal Reserve Banks is located in:

Accepted Answer

A)   Washington D.C.
B)   San Francisco since it serves almost one-third of the country.
C)   New York City.
D)   Kansas City.E) B) and C)
F) A) and B)

Question 5

Members of the Board of Governors of the Fed:

Accepted Answer

A)   can be reappointed after their term expires.
B)   must leave office when there is a new administration elected.
C)   serve one non-renewable fourteen-year term.
D)   are appointed for life, though they can resign at any time.E) A) and D)
F) None of the above

Question 6

Which of the following is (are)  not a permanent voting member(s)  on the FOMC?

Accepted Answer

A)   The seven Governors of the Fed
B)   The Secretary of the Treasury
C)   The President of the Federal Reserve Bank of New York
D)   The chair of the Board of GovernorsE) All of the above
F) A) and C)

Question 7

The Federal Reserve was created in:

Accepted Answer

A)   1929.
B)   1913.
C)   1909.
D)   1945.E) A) and B)
F) A) and C)

Question 8

The Governors of the Federal Reserve System are appointed by the:

Accepted Answer

A)   member banks from their home district.
B)   Board of Directors of the Reserve Bank from their home district.
C)   President of the United States.
D)   Chairman of the Federal Reserve System.E) B) and C)
F) A) and D)

Question 9

What is the difference between the European System of Central Banks and the Euro system?

Accepted Answer

The European System of Central Banks is ...

Question 10

The real power in the FOMC lies with:

Accepted Answer

A)   the President of the New York Fed Bank.
B)   the System Open Market Manager.
C)   the Chairman of the Board of Governors.
D)   no single individual; all participants have an equal share of the power.E) B) and C)
F) A) and C)

Question 11

The members of the Board of Governors in recent years have been all of the following, except:

Accepted Answer

A)   former academic economists.
B)   former economic forecasters.
C)   a current Secretary of the Treasury.
D)   former bankers.E) C) and D)
F) B) and C)

Question 12

The number of regional Federal Reserve Banks is:

Accepted Answer

A)   nine.
B)   seven.
C)   five.
D)   twelve.E) All of the above
F) A) and B)

Question 13

There are several important differences between the Fed and the European Central Bank
(ECB). What are they?

Accepted Answer

First, the implementation of monetary po...

Question 14

Given the democratic political structure of the United States, make an argument against the independence granted the Federal Reserve.

Accepted Answer

One could argue that the significance an...

Question 15

Who makes up the voting members of the Federal Reserve's Open Market Committee?

Accepted Answer

The voting members of the FOMC include t...

Question 16

The number of voting members on the Federal Open Market Committee is:

Accepted Answer

A)   7.
B)   12.
C)   19.
D)   8.E) A) and B)
F) A) and D)

Question 17

What argument can you offer to justify the policy prohibiting formal voting during the Euro systems Governing Council meetings?

Accepted Answer

The answer lies with the fact that the m...

Question 18

The Agreement to form a European monetary union was formalized in the Treaty of:

Accepted Answer

A)   Maastricht.
B)   Paris.
C)   Amsterdam.
D)   Milan.E) C) and D)
F) A) and C)

Question 19

Which of the following is responsible for invoking the Fed's emergency powers?

Accepted Answer

A)   FOMC
B)   Board of Governors
C)   Fed Chairman
D)   a majority of the Federal Reserve Bank presidentsE) A) and B)
F) B) and C)

Question 20

The interest rate that the FOMC currently chooses to control is:

Accepted Answer

A)   the federal funds rate.
B)   the 30-year Treasury bond rate.
C)   the discount rate.
D)   the prime rate.E) None of the above
F) A) and D)

Exam 16: The Structure of Central Banks: The Federal Reserve and the European Central Bank

What is the difference between the European System of Central Banks and the Euro system?

Correct AnswerverifiedThe European System of Central Banks is ...View AnswerShow Answer

The real power in the FOMC lies with:

Correct AnswerverifiedShow Answer

What argument can you offer to justify the policy prohibiting formal voting during the Euro systems Governing Council meetings?

Correct AnswerverifiedThe answer lies with the fact that the m...View AnswerShow Answer

The interest rate that the FOMC currently chooses to control is:

Correct AnswerverifiedShow Answer

Members of the Board of Governors of the Fed:

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Who makes up the voting members of the Federal Reserve's Open Market Committee?

Correct AnswerverifiedThe voting members of the FOMC include t...View AnswerShow Answer

Which of the following is responsible for invoking the Fed's emergency powers?

Correct AnswerverifiedShow Answer

How is accountability achieved for the Federal Reserve and is it clear?

Correct AnswerverifiedThe Congress of the United States has se...View AnswerShow Answer

The Governors of the Federal Reserve System are appointed by the:

Correct AnswerverifiedShow Answer

The ECB's Governing Council has price stability as a primary objective. It has defined price stability as:

Correct AnswerverifiedShow Answer

The Agreement to form a European monetary union was formalized in the Treaty of:

Correct AnswerverifiedShow Answer

Which of the following is (are) not a permanent voting member(s) on the FOMC?

Correct AnswerverifiedShow Answer

The members of the Board of Governors in recent years have been all of the following, except:

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The number of regional Federal Reserve Banks is:

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The number of voting members on the Federal Open Market Committee is:

Correct AnswerverifiedShow Answer

A large step toward independence occurred for the Fed in 1935 when the:

Correct AnswerverifiedShow Answer

The largest of the regional Federal Reserve Banks is located in:

Correct AnswerverifiedShow Answer

There are several important differences between the Fed and the European Central Bank (ECB). What are they?

Correct AnswerverifiedFirst, the implementation of monetary po...View AnswerShow Answer

The Federal Reserve was created in:

Correct AnswerverifiedShow Answer

Given the democratic political structure of the United States, make an argument against the independence granted the Federal Reserve.

Correct AnswerverifiedOne could argue that the significance an...View AnswerShow Answer

Correct Answer
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The European System of Central Banks is ...
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Correct Answer
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The answer lies with the fact that the m...
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The voting members of the FOMC include t...
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Correct Answer
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The Congress of the United States has se...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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First, the implementation of monetary po...
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Correct Answer
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Correct Answer
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One could argue that the significance an...
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