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The Fed can control stock market purchases by adjusting the

The Fed can control stock market purchases by adjusting the

a.discount rate

b.legal reserve requirement

c.margin requirement

d.federal funds rate

e.stock loan rate

153.              The margin requirement is the maximum percentage of the price of a(n)

a.bond that can be used as collateral to borrow from a bank

b.investment good that can be used as collateral to borrow from a bank

c.home mortgage that can be used as collateral to borrow from a bank

d.stock that can be used as collateral to borrow from a bank

e.an asset that can be used as collateral to borrow from the Fed

154.              When the Fed’s chairman, Alan Greenspan, expresses his concern about economic
                            conditions and warns about possible economic problems, he is using

a.one of the most effective tools of monetary policy

b.or rather misusing his position because Fed members should not express personal
views on policy

c.the media to set his policies against the government’s, otherwise he would not have
gone public with them

d.the media to demonstrate that the Fed and government are planning consistent
monetary and fiscal policies

e.moral suasion

155.              If you were the chairman of the Fed and had to develop effective countercyclical
                            monetary policy during a recession, you would lower

a.the legal reserve requirement, cut the discount rate, and sell government bonds on the
open market

b.the legal reserve requirement, raise the discount rate, and sell government bonds on
the open market

c.the legal reserve requirement, raise the discount rate, and buy government bonds on
the open market

d.the discount rate, cut the discount rate, and raise the margin requirement

e.the reserve requirement, lower the discount rate, and buy government bonds on the
open market

156.              The Fed’s countercyclical policy during the expansion and prosperity phases of the
                            business cycle includes

a.raising the legal reserve requirement, raising the discount rate, and selling
government bonds on the open market

b.raising the legal reserve requirement, raising the discount rate, and buying
government bonds on the open market

c.raising the legal reserve requirement, cutting the discount rate, and selling
government bonds on the open market

d.raising the legal reserve requirement, cutting the discount rate, and buying
government bonds on the open market

e.lowering the legal reserve requirement, cutting discount rates, and buying
government bonds on the open market

157.              In executing countercyclical policy, the Fed

a.is more effective during recessions than during inflationary periods

b.is more effective during inflationary periods than during recessions

c.is typically ineffectual because it is difficult for the Fed to determine just where the
economy is on the business cycle

d.relies on the government to execute complementary fiscal policy otherwise the Fed’s
monetary policy is weak and typically ineffective

e.relies more on moral suasion than on the three primary tools available to it

158.              The first money issued by a United States’ governmental authority were

a.bank notes issued by the United States Treasury 1766, 10 years before the founding
of the Republic

b.silver certificates issued by the Federal Reserve on the eve of the American
revolution

c.Continental Notes issued by the Continental Congress to finance the Revolutionary
War

d.greenbacks issued by the Treasury to finance the War of 1812

e.gold certificates issued by the Federal Reserve during American revolution

159.              The first bank chartered in the United States was the

a.First National Bank of the United States

b.First National Bank of Boston

c.First National Bank of New York

d.Bank of North America

e.Federal Reserve

160.              Commercial banks in the United States can be chartered

a.by state governments and the federal government

b.only by state governments

c.only by the federal government

d.only by the nationally chartered bank in Washington, D.C.

e.only by the Federal Reserve

Feb 11 2020 View more View Less

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