All Else

Question 1

The long-run goal of any monetary authority is ___.

Answer 1

Price stability

Question 2

Since ___ is a long-term goal, but not a short-run, central banks can focus on reducing output fluctuations by allowing ___ to deviate from the long-run goal, and can operate under a ___.

Answer 2

Price stability, allowing inflation, dual mandate.

Question 3

The Board of Gov has ___ members, including the ___, appointed by the ___ and confirmed by the ___.

Answer 3

Seven, Chairman, President, Senate

Question 4

The Board of Gov appoints ___ directors to each FRB.

Answer 4

Three

Question 5

The 12 FRB each have ___ directors who appoint the ___ and other officers of the FRB.

Answer 5

Nine, President

Question 6

Around 2,900 member banks elect ___ directors to each FRB.

Answer 6

Six

Question 7

The FOMC consists of ___ members of the Board of Gov plus presidents of the FRBNY and ___ other FRBs.

Answer 7

Seven, four

Question 8

The ___ select the members of the Federal Advisory Coucil, which is comprised of ___ members (bankers), one from each district.

Answer 8

Twelve FBRs, twelve.

Question 9

The ___ set (within limits) the reserve requirements.

Answer 9

Board of Gov

Question 10

The Board of Go also review and determine the ___.

Answer 10

Discount rate

Question 11

The FOMC directs ___.

Answer 11

Open market ops

Question 12

The 12 FRBs (each with ___ directors) establish the ___.

Answer 12

12, Discount rate

Question 13

If the public demands more currency, this ___ the monetary base and ___ bank reserves.

Answer 13

Does not reduce, reduces

Question 14

Bernake’s Financial Accelerator addresses the impact of ___ values or the ability to obtain ___/___. The External Finance premium involves ___ and ___.

Answer 14

Collateral, credit/financing, business firms and households

Question 15

If inflation rises by 1.5%, by the Taylor rule the funds target rate should rise by ___.

Answer 15

1.5%

Question 16

If GDP rises by 1.5%, by the Taylor rule the funds target rate should rise by ___.

Answer 16

0.5%

Question 17

By paying IOR the Fed could ___ without having the funds rate ___.

Answer 17

Expand its balance sheet, fall to zero

Question 18

The discount rate sets a ___ on the funds rate. The supply of reserves is ___ when the FFR is less than the primary discount rate, and ___ when they are equal.

Answer 18

Ceiling, vertical, horizontal

Question 19

Under the maturity extension program, the Fed sells ___ term securities, and uses the proceeds to buy ___ term securities.

Answer 19

Short term, long term