Question

8. According to the textbook, which of the following statements about the Federal Open Market Committee (FOMC) is (are) correct?
(x) At the Federal Reserve, the nation’s monetary policy is made by the FOMC, which meets about every six weeks to discuss changes in the economy.
(y) At any given time, the voting members of the FOMC include five of the presidents of the regional Federal Reserve banks, the president of the Federal Reserve Bank of New York and the seven members of the Board of Governors.
(z) All regional Fed presidents attend the FOMC meetings, but only five get to vote
A. (x), (y) and (z) B. (x) and (y), only
C. (x) and (z), only D. (y) and (z), only
E. (x) only

9. According to the textbook, which of the following is NOT a reason the New York Federal Reserve Bank president always gets to vote at the Federal Open Market Committee meetings?
A. All Fed purchases and sales of bonds go through the New York Fed’s trading desk.
B. New York is the traditional financial center of the U.S. economy.
C. New York has higher population than other cities in the U.S.
D. All of the above are reasons.
E. Both A and B are not reasons.

12. A bank loans $75,000 to Dora’s Dress Shop for the remodel of a building that Dora’s wants to use as a new store. On their respective balance sheets, this loan is a
A. liability for the bank and an asset for Dora’s Dress Shop. The loan does not increase the money supply.
B. liability for Dora’s Dress Shop and an asset for the bank. The loan does not increase the money supply.
C. liability for the bank and an asset for Dora’s Dress Shop. The loan increases the money supply.
D. liability for the bank and an asset for Dora’s Dress Shop. The loan decreases the money supply.
E. liability for Dora’s Dress Shop and an asset for the bank. The loan increases the money supply.

Answer 1

8) FOMC is the federal reservce committee that makes the monetary policy every six weeks, i,e. 8 times a year. It consists of 12 members, 7 members of the board of govrnors of the federal reserve,  president of the New York Federal Reserve and 4 of the presidents of the regional federal reserve banks. These 12 members are the voting members. Hence X is right,

Therefore option E is right