Money and Banking Quiz

What is the policy tool of setting the discount rate and the terms of discount lending?

• Discount policy

• Interest on reserve balances

• Reserve requirement

• Open market operations

Which tool of monetary policy involves the Fed's purchases and sales of securities in financial markets?

• Reserve requirement

• Discount policy

• Open market operations

• Interest on reserve balances

What is the means by which the Fed makes discount loans to banks, serving as the channel for meeting the liquidity needs of banks?

• Term deposit facility

• Discount window

• Primary credit

• Secondary credit

During the financial crisis, the Fed introduced two new policy tools connected with bank reserve accounts. Which of the following is NOT one of those tools?

• Open market operations

• Quantitative Easing

• Term deposit facility

• Interest on reserve balances

What is the policy of a central bank attempting to stimulate the economy by buying long-term securities called?

• Reserve requirement

• Open market operations

• Quantitative Easing

• Discount policy

Which type of discount loan is intended to allow the investment banks and large securities firms to obtain emergency loans?

• Primary credit

• Secondary credit

• Seasonal credit

• Term deposit facility

What is the regulation requiring banks to hold a fraction of checkable deposits as vault cash or deposits with the Fed?

• Interest on reserve balances

• Open market operations

• Reserve requirement

• Discount policy

Which tool of monetary policy involves Fed purchases and sales of securities in financial markets?

• Open market operations

• Reserve requirement

• Interest on reserve balances

• Discount policy

What is the interest rate that banks charge each other on very short-term loans called?

• Discount rate

• Federal funds rate

• Interest on reserve balances

• Reserve requirement

Which tool of monetary policy is used to influence the federal funds rate and the money supply?

• Reserve requirement

• Discount policy

• Open market operations

• Interest on reserve balances