Ch. 16

Question 1

twelve federal districts

Answer 1

of federal districts

Question 2

reserve requirements, discount rate, open market operation

Answer 2

3 tools of monetary policy

Question 3

rate the Federal Reserve charges for loans to commercial banks

Answer 3

discount rate

Question 4

reserves greater than the required amounts

Answer 4

excess reserve

Question 5

the research arm of the Federal Reserve

Answer 5

federal advisory council (FAC)

Question 6

Federal Reserve committee that makes key decisions about interest rates and the growth of the US money supply

Answer 6

federal open market committee (FOMC)

Question 7

central group of banks could lend to other banks in times of need

Answer 7

functions of the fed

Question 8

delay in implementing monetary policy

Answer 8

inside time lag

Question 9

actions in the Federal Reserve takes to influence the level of real GDP and the rate of inflation in the economy

Answer 9

monetary policy

Question 10

amount of new money that will be created with each demand deposit, 1 / RRR

Answer 10

money multiplier

Question 11

buying and selling of government securities to alter the supply of money

Answer 11

open market operations

Question 12

the time it takes for monetary policy to have an effect

Answer 12

outside time lag

Question 13

the fed. charges the interest rate to increase or decrease money supply

Answer 13

relationship between interest rate, fed., and money supply