The Federal Reserve & Monetary Policy

On ___ , the FOMC issued its first statement about its monetary policy decision following a meeting.

• Feb. 4, 1994

• Aug. 18, 1998

• Jan. 6, 1993

• Feb. 1, 1994

Which is a tool of monetary policy? (Hint: More than 1)

• Open Market Operations

• Reserve Requirement Changes

• Interest on Excess Reserves

• Discount Rate

• All the above

The Federal Reserve can buy and sell securities from banks to influence the supply of money.

• Discount Rate

• Interest on Excess Reserves

• Open Market Operations

• Reserve Requirement Changes

When the Fed loans money to banks, the bank's reserve balances increase.

• Open Market Operations

• Reserve Requirement Changes

• Interest on Excess Reserves

• Discount Rate

The Fed Board of Governors sets the percentage of deposits that banks must keep in reserve.

• Reserve Requirement Changes

• Open Market Operations

• The Discount Rate

• Interest on Excess Reserves

In 2006 Congress gave the Fed power to pay interest on the deposits by banks in their reserve accounts.

• Discount Rate

• Reserve Requirement Changes

• Interest on Excess Reserves

• Open Market Operations

The Structure of the Federal Reserve: Advisory Committees Hint: 3 must be chosen.

• Thrift Institutions Advisory Council

• Consumer Advisory Committee

• Executive Committee

• Federal Advisory Committee

Federal Reserve Regulatory Responsibilities: It is responsible for checking the money that state-chartered member banks set aside. The reserved money pays checks that bank customer write and is used to control the money supply.

• Regulates Bank Holding Companies

• Regulates Foreign Banking Operations

• Approves Bank Mergers

• Checks the money

Federal Reserve Regulatory Responsibilities: It regulates the corporations that own one or more banks to ensure that they are operating within the interests of all stakeholders.

• Checks the money

• Regulates Bank Holding Companies

• Regulates Foreign Banking Operations

• Approves Bank Mergers

Federal Reserve Regulatory Responsibilities: It regulates the corporations that own one or more banks to ensure that they are operating within the interests of all stakeholders.

• Regulates Foreign Banking Operations

• Checks Money

• Approves Bank Mergers

• Regulates Bank Holding Companies