1 . The Fed gets their power to influence interest rates from:

A) their ability to control the money supply

B) government regulation that requires banks adhere to policy directives issues by the

Fed

C) their ability to dictate demand for loanable funds

D) the fact that they run the discount window

E) they have no power to influence interest rates

2. Financial institutions

A) assist surplus economic units and deficit economic units.

B) analyze and absorb credit risk.

C) both (a) and (b)

D) neither (a) nor (b)