The Federal Open Market Committee (FOMC) is composed of the seven members of the Board of Governors,
A) the president of the New York Federal Reserve District Bank, and four of the remaining 11 Federal Reserve District Bank presidents who rotate on an annual basis.
B) and five state governors who rotate on an annual basis.
C) four Federal Reserve District Bank presidents who rotate on an annual basis, and the head of the Senate Banking Committee.
D) and the Secretary of the Treasury.
A
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The change in import spending due to a change in domestic real income is called:
A) marginal propensity to save. B) marginal propensity to consume. C) marginal propensity to import. D) none of the above.
The stock of high-powered money in the economy is $80 billion. The bank reserve-holding ratio is 0.12 and the public wishes to hold 10% of its deposits as cash. The money supply will be approximately
A) $363 billion assuming the 80 billion of high-powered money is held by banks. B) $400 billion assuming the 80 billion of high-powered money is held by the Fed or in bank vaults. C) $327 billion assuming the 80 billion of high-powered money is not held by the Fed or in bank vaults. D) $425 billion assuming the 80 billion of high-powered money is held by banks.