16.Which of the following isnota function of the Fed?

a.to serve as a fiscal agent (bank) for commercial banks.

b.to hold depository institutions' reserve.

c.to clear the checks for member banks.

d.to borrow money from the banks

17.Moneyis defined by economists as

a.the market value of an asset.

b.the funds one receives during a specified period of time.

c.anythingor any good that is widely accepted in exchange for goods and services and for the repayment of debts.

d.both b and c

18.Suppose that during a period of inflation, the Fed reduced its holding of U.S. securities from $600 billion to $580 billion. This indicates that the Fed was

a.seeking to reduce the money supply to decrease inflation.

b.trying to force Congress to decrease taxes.

c.expanding the money supply and stimulating employment.

d.expanding the money supply, even though the existing inflation suggested a restrictive policy would be more appropriate.

19.Money is used as a unit of account. This means money

a.cannot store value for use in the future.

b.is used to measure the exchange value and costs of goods, services, assets, and resources.

c.has little or no intrinsic value.

d.is dependent of the quantity of gold held by the Federal Reserve

20.Reserve requirements

a.are an arrangement in which the Federal Reserve Bank stands ready to lend money to banks in trouble.

b.are rules set by the Federal Reserve that determines the minimum reserve ratio for banks.

c.its outstanding loans.

d.are banks' deposit insurance.