There are Federal Reserve regional banks. Which of the following is a responsibi
ID: 1200557 • Letter: T
Question
There are Federal Reserve regional banks. Which of the following is a responsibility of the Federal Open Market Committee (FOMC)? Making decisions regarding monetary policy Issuing mortgages to homeowners Buying and selling stocks The Federal Reserve's major monetary tool involving buying and selling of government bonds is called the. In order to increase the number of dollars in the U.S. economy (the money the discount rate open market operations the reserve requirement supply), the Federal Reserve will U.S. government bonds. Which of the following are functions of the Federal Reserve System? Check all that apply. Archiving health records of U.S. citizens Serving as the government's banker Holding depository institutions' reserves Controlling the money supply The discount rate is the interest rate the Fed charges on loans of reserves to banks. The federal funds rate is the interest rate banks charge for overnight loans of reserves to other banks. Which of the following statements about the discount rate and the federal funds rate are true? Check all that apply. If the Fed wants to contract the money supply, it reduces the discount rate. If the federal funds rate is higher than the discount rate, banks will borrow from the discount window. A lower discount rate encourages banks to borrow reserves and make loans. Usually, banks borrow money from the federal funds market rather than from the discount window. Select the correct term for each of the following definitions.Explanation / Answer
1. There are 12 federal reserve regional banks.
2. FOMC makes decisions regarding monetary policiy.
3. Fed's major monetary tool involving buying or selling of bonds is called open market operations.
4. In order to increase the number of dollars in US economy, Fed will buy US bonds. (Fed buys bonds, releasing money in the system)
5. Fed functions are all of the below mentioned except archiving health records.
6. 2 & 3 point are true i.e. banks borrow from discount winow if fed funds rate is higher than discount rate & a lower discount rate encourages banks to borrow reserves.
7.a. the twelve member policy making group: FOMC (Federal Open Market Committee )
b. Governing body: Board of Governers
c. interest rate Fed charges banks: Discount rate
d. Monetary Tool: TAF (Term Auction Facility)
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