1. The Federal Reserve holds deposits from

A) Consumers.

B) Banks.

C) The U.S. Treasury.

D) Large corporations.

2. If the Fed's objective is to stimulate the economy, which ofthe following gives the correct sequence of events?

A) The money supply increases, interest rates decrease,investment increases, and AD increases.

B) The money supply increases, interest rates decrease,investment increases, and AS decreases.

C) The money supply decreases, interest rates increase,investment decreases, and AD decreases.

D) The money supply decreases, interest rates increase,investment increases, and AD increases.

3. The value of the multiplier will be larger, the

A) Smaller the value of the marginal propensity to save.

B) Smaller the APC.

C) Larger the value of the MPS.

D) Smaller the APS.

4. The Board of Governors of FED consists of

A) 7 members, appointed for 14-year terms.

B) 26 members, appointed for 2-year terms.

C) 14 members, appointed for 7-year terms.

D) 50 members, appointed for 7-year terms.