Homework answers / question archive / 1)If the Fed were to increase the reserve requirement, which of the following would occur? The reservation of promised capital would be reduced

1)If the Fed were to increase the reserve requirement, which of the following would occur? The reservation of promised capital would be reduced

Business

Share With

---

1)If the Fed were to increase the reserve requirement, which of the following would occur?

The reservation of promised capital would be reduced.

Banks would be required to increase the amount of money they physically keep in their vaults.

The funds cash flow requirement would significantly increase, which would increase the money supply.

The economy would stabilize and fall to zero inflation.

When the Fed buys and sells U.S. government bonds in an effort to regulate the money supply, it is engaged in ________.

closed market practices

open-market operations

reserve equity strategy

federal fund rates adjustment

 

Too much money chasing too few goods is characterized by the term ________.

recession

inflation

deflation

monetary policy

 

An increase in the discount rate would have the effect of ________.

more people wanting to borrow money

more businesses wanting to borrow money

loosening of the money supply

tightening of the money supply

 

The bank failures of 1907 and the resulting cash shortage problems led to the creation of:

the Federal Reserve System.

the gold standard.

monetary policy.

the money supply.

 

The bank failures that were occurring in 1930s due to the effects of the Great Depression led to the creation of:

laws which prevented banks from failing.

the Federal Reserve System.

federal deposit insurance.

nonbanks.

 

The goal of the commercial bank is to:

generate more revenue from loans than it pays out in interest to depositors.

generate more interest from depositors than it pays out to borrowers.

decrease the need to loan money and only focus on paying interest to depositors.

decrease interest rate payments made by borrowers and increase interest payments to depositors.

 

Online banking:

has grown unpopular and is not expected to grow much further.

allows customers to do all financial transactions from home at no cost.

has higher expenses because administrators of the online systems and software designers must be hired.

will most likely continue in financial institutions that offer traditional banking facilities as well as online services.

 

The ________ focuses on economic development throughout the world, with emphasis on emerging economies.

Federal Reserve Bank

International Monetary Fund

World Bank

Bank of the Americas

 

Cooperative monetary policies designed to stabilize currency exchanges among 188 countries are coordinated through which of the following organizations?

International Monetary Fund

International Banking Union

United Nations

NATO