1. (I) Only member banks can take advantage of Federal Reserve Banks' discount window. (II) FDIC only provide deposit insurance to member banks.

a. (I) is true, (II) is false.

b. (I) is false, (II) is true.

c. both are true.

d. both are false.

2. The Federal Reserve can influence the money supply by buying securities, which ________ reserves in the market, thereby ________ the money supply

a. adds; raising

b. removes; lowering

c. adds; lowering

d. removes; raising

3. If the Fed wants to reduce money supply, it will ________ securities to ________ the market.

a. sell; add reserves /money to

b. sell; remove reserves/money from

c. buy; add reserves/money to

d. buy; remove reserves/money from