1. It is the legal obligation of the Federal Reserve to conduct monetary policy

Question

1.    It is the legal obligation of the Federal Reserve to conduct monetary policy to achieve its macroeconomic objectives of maximum employment and stable prices.

True

False

1.    Generally, the FOMC conducts policy by adjusting the level of short-term interest rates in response to changes in the economic outlook.

True

False

1.     Reserve Banks of the Federal Reserve System of the United States provide accounts to depository institutions--banks, thrifts, and credit unions--in which those institutions hold reserve balances, make loans to depository institutions, move currency and coin into and out of circulation, collect and process millions of checks and other payments each day, provide checking accounts and other services for the Treasury, issue and redeem government securities, and act in other ways as fiscal agent for the U.S. government.

True

False

1.    The Federal Reserve has the ability to set all interest rates in the economy including mortgage rates and credit card rates.

True

False

1.    The FOMC is intentionally vague about its course for monetary policy. This is done to limit speculation in the stock and bond markets.

True

False

Explanation / Answer

1. It is true that it is the legal obligation of the Federal Reserve to conduct monetary policy to achieve its macroeconomic objectives of maximum employment and stable prices.

2. It is true that generally, the FOMC conducts policy by adjusting the level of short-term interest rates in response to changes in the economic outlook.

3. It is true that Reserve Banks of the Federal Reserve System of the United States provide accounts to depository institutions--banks, thrifts, and credit unions--in which those institutions hold reserve balances, make loans to depository institutions, move currency and coin into and out of circulation, collect and process millions of checks and other payments each day, provide checking accounts and other services for the Treasury, issue and redeem government securities, and act in other ways as fiscal agent for the U.S. government.

4. It is true that the Federal Reserve has the ability to set all interest rates in the economy including mortgage rates and credit card rates.

5. It is true that the FOMC is intentionally vague about its course for monetary policy. This is done to limit speculation in the stock and bond markets.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.