What is the Accounting Equation, the cardinal rule of bank accounting?
100
Banks, Financial Institutions, and Governments
Who does the Fed provide banking services for?
100
Issue bank notes, buy and sell government securities, extend loans to member banks, clear checks in the banking system, reserve requirements for member banks
List a few powers possessed by the Fed
100
Discount Rate, Reserve Requirements, Open Market Operations
What are the 3 traditional tools of monetary policy?
200
$30
If I had assets of $50 and $20 of equity, what are my liabilities?
200
12, Richmond
How many Federal Reserve District Banks are there in the US? Which one is JMU in?
200
7 Board of Governors 5 District Banks Presidents
What is the composition of the FOMC (Federal Open Market Committee?)
200
the FFR is the interbank overnight lending rate while the discount rate is the interest enforced when borrowing from the fed
Distinguish between the federal funds rate and the discount rate
300
Required are enforced by the Fed and must be kept at the bank - excess can be lent out
What is the difference between required and excess reserves?
300
Banks panics across the US during the financial crisis of the Great Depression
What events spurred the creation of the Federal Reserve?
300
Money Supply (Monetary Base specifically)
What part of the US economy can the Fed directly manipulate?
300
Changing the money supply
How does the Fed control the FFR?
400
$90, 10
If the RR is 10% and Wells Fargo received $100 in deposits, how much can I lend out? What is the Money Multiplier?
400
Board of Governors, Janet Yellen
Who is responsible for US monetary policy and who is the current Chair?
400
Rate at which banks can borrow directly from the Fed, 0.75%
What is the discount rate? What is it currently?
400
Increase the money supply to lower interest rates
If the US was in recession, what might the Fed do to increase economic activity?
500
Because a certain percentage of reserves must be kept within the bank, any given increase in deposits causes a multiplying effect of deposit increases across the economy
How does the fractional reserve system work?
500
Quantitative Easing
What program did the Fed recently terminate?
500
Stable prices and full employment
What mandate does the Fed follow in making policy decisions?
500
Buy securities from the government in massive amounts, use forward guidance to guide markets, drove interest rates to 0
How has Federal Reserve tools changed since the financial crisis?