Question 1

Why can't two Governors of the Fed come from the same district and does this limitation make sense today?

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Question 2

What argument can you offer to justify the policy prohibiting formal voting during the Euro systems Governing Council meetings?

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Question 3

Why is it technically incorrect to say that the board of directors of the regional Fed banks set the discount rate that each bank charges?

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Question 4

There are several important differences between the Fed and the European Central Bank (ECB).What are they?

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Question 5

Given the democratic political structure of the United States, make an argument against the independence granted the Federal Reserve.

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Question 6

What is the difference between the European System of Central Banks and the Euro system?

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Question 7

In what ways do the regional Federal Reserve Banks influence monetary policy?

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Question 8

Respond to the following statement with a brief explanation: "The Federal Reserve can improve the operating performance of the stock market but it cannot prevent a stock market crash."

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Question 9

Considering the three branches that make up the Federal Reserve System, identify the corresponding branches that make up the Euro system.Be sure to state which part of the Euro system corresponds to which part of the Federal Reserve System.

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Question 10

In terms of transparency and communications, what are the significant differences regarding the information that is made available immediately after the meetings of the FOMC and the Euro system's Governing Council?

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Question 11

Chapter 15 laid out the criteria for an effective central bank.Two of these criteria focused on accountability and transparency.How accountability is achieved for the Federal Reserve and is it clear?

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Question 12

Why can it be argued that, while interest rate decisions are made by the FOMC, a committee, the real power of the committee lies with the Chairman of the Federal Reserve System?

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Question 13

Identify an advantage and a disadvantage of requiring the Fed to state an explicit numerical target for inflation.

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Question 14

The Federal Reserve is the U.S.government's bank.Identify the functions the Fed performs in this role.

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Question 15

In the mid 1930s, the Federal Reserve became more independent from political pressure.What significant changes occurred then to increase the Fed's independence?

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Question 16

What are the three criteria that are used to judge a central bank's independence and how does the Fed stack up to each of these criteria?

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Question 17

Who makes up the voting members of the Federal Reserve's Open Market Committee?

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Question 18

How are the locations of the twelve regional Federal Reserve Banks and the corresponding districts explained?

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Question 19

Explain why the decision to join the Euro system presents serious domestic monetary policy issues.

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Question 20

If it is the real rate of interest that savers and borrowers respond to, how does the Fed impact a real rate by targeting a nominal rate of interest?

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Quiz 16: The Structure of Central Banks: the Federal Reserve and the European Central Bank