ECON 3320                                                                                        Name_____________
Exam #2                                                                                               May 10, 2005

1.      There are ___________districts in the Federal Reserve System.
2.            The federal funds rate is currently pegged at __________________.
3.            The current president of Russia is ________________________.

Answer four (4) of the following six (6) questions.

1.            What kind of limitations are there in banking on competition?  Do we need these controls?  Discuss and critically evaluate.

2.            What are the Fed’s three tools of monetary policy?  Compare and contrast their effectiveness.

3.            Why should the Fed be independent?  What might happen if the Fed was not independent?

4.            What is the money multiplier?  What kinds of factors affect the money multiplier and changes in the money supply?

5.            How can the Treasury affect the financial system?  How do they tend to minimize this impact?

6.            What important changes have there been in the financial sector in recent decades?  Are the effects of these changes positive or negative?  Discuss.