1.The Fed's key function is to

a)make sure the nation's banking system is sound and safe

b)promote a healthy economy by using monetary policy

c)maintain effective payment system for banks and governments

d)all of the above

2. Major economic crises such as the Great Depression of the 1930s led to the expansion of the Fed's role in the U.S. banking system and with managing the U.S. economy

a)True

b)False

3. Which of the following is a function of money?

a) relatively scarce

b) portability

c) medium of exchange

d) acceptability

4.Whichfunction of money encourages people to save money?

a)medium of exchange

b)acceptability

c)store of value

d) unit of account

5.Money that has value because the Government declared that it is money

a)commodity money

b)fiat money

c)currency

d)coins

6.At the grocery store last week, you purchased $94.25 worth of groceries. You paid for the groceries in cash. You gave the cashier four $20 bills, a $10 bill, three $1 bills, and a quarter. What is the primary function of money exhibited here?

a)acceptable

b)store of value

c)unit of account

d)medium of exchange