Chapter 13 Central Banks And The Federal Reserve System Jeopardy Template

Origins of The Federal Reserve System	Structure of the Federal Reserve System	How Independent is the Fed?	Central Bank Behavior	Should the Fed Be Independent?
100 FALSE T/F - Of all the central banks in the world, the Federal Reserve System has the most usual structure.	100 FALSE T / F Setting the reserve requirement is a function performed by the twelve Federal Reserve Banks?	100 TRUE T/F The Fed’s source of revenue is free from the appropriations process.	100 TRUE T / F The members of the board generally cannot be reappointed to their position so they do not need to do favors to keep their job in the future.	100 C) Both A and B. The theory of bureaucratic behavior suggests that the Federal Reserve will A) Try to avoid a conflict with the President and Congress over increases in Interest rates. B) Try to gain regulatory power over more banks. C) Both A and B.
200 TRUE T/F – Before the twentieth century, a major characteristic of American politics was the fear of centralized power.	200 FALSE As part of the Checks and Balances of the Federal Reserve System all depository institutions keep deposits there?	200 You can only be appointed for a fourteen-year term and the term is not renewable. What are the regulations of becoming part of the Board of Governors	200 THE POLITICAL BUSINESS CYCLE Just before an election expansionary policies are pursued to lower unemployment and interest rates. After the election contractionary policies are required to combat the resulting inflation and high interest rates. This is called...	200 A) Its own welfare. The theory of bureaucratic behavior suggests that the objective of a bureaucracy is to maximize? A) Its own welfare. B) Profits C) Loses D) Conflicts between the executive and legislative branches of government.
300 C) 12 How many Federal Reserve banks did the founders decide to set up? a) 10 b) 8 c) 12	300 A) That the Fed’s power was not centralized in a single location What did the writers of the Federal Reserve Act want to ensure by setting up 12 regional Federal Reserve Banks? A) That the Fed’s power was not centralized in a single location. B) That money would be evenly distributed and not all held at one location.	300 The President can appoint one or two members into the Board of Governors. He can also appoint a chairman of the Board of Governors every term. How does the President influence the Federal Reserve?	300 TRUE T / F Subjecting the Fed to direct presidential or congressional control would may impart an inflationary bias to monetary policy.	300 B) Power and Prestige The welfare of a bureaucracy such as the Fed is related to its A) Wealth and spending B) Power and Prestige C) Interest and loans D) Inventions and developments
400 C) All of the Above What convinced the public that a central bank was needed to prevent future panics? a) Widespread bank failures b) Substantial losses to depositors c) All the above	400 The population and economic interests in 1913 What do the geographic sizes of the 12 districts represent?	400 B. The fourteen-year nonrenewable terms of governors effectively insulate the Board of Governors from political pressure. A. In order to gain additional power to regulate the financial system, the governors need the support of Congress and the president to pass the favorable legislation. B. The fourteen-year nonrenewable terms of governors effectively insulate the Boar	400 Was Poor Lender of Last Resort during the Great Depression. Had overly expansionary policy in 60's and 70's leading to rapid inflation. Cite one example of the Central Bank not using its freedom successfully.	400 B) The fed mobilized a lobby of bankers and business people to preserve its independence. How did the Fed stop congressional efforts that threated its independence? A) The fed threatened to strike. B) The fed mobilized a lobby of bankers and business people to preserve it's independence. C) The fed reduced interest rates D) The fed increased
500 There was no lender of last resort. Why did the termination of the Second Bank’s national charter create a severe problem for American financial markets?	500 Opportunities for political interests to interfere with the monetary policy process What could be created if congress were to rewrite the Federal Reserve Act?	500 Instruction independence Goal independence What are two different types of independence of central banks? List and explain	500 short-run objectives and thus be more likely to engage in expansionary policies designed to lower unemployment and interest rates before an election. Why might eliminating the Fed's independence lead to a more pronounced political business cycle?	500 A) Resists so vigorously congressional attempts to limit the central bank’s Autonomy. The theory of bureaucratic behavior when applied to the Fed helps to explain why the Fed A) Resists so vigorously congressional attempts to limit the central bank’s Autonomy. B) Sought less control over banks in the 1980s. C) All of the above.

Chapter 13 Central Banks and The Federal Reserve System

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