31.

Which of the following provided a common rationale for founding the Federal Reserve System?

I. The need to establish a "lender of last resort" to prevent banks from becoming insolvent

II. The need for an "elastic currency" to allow the money supply to expand and contract

III. The need to create more commercial bank notes and credit to meet borrowing demand

Select one:

a. I only

b. I and II only

c. I and III only

d. I, II, and III

32.

Which of the following argued against the United States having a central bank?

I. Thomas Jefferson

II. Alexander Hamilton

III. Robert Morris

Select one:

a. I only

b. I and II only

c. I and III only

d. I, II, and III

33.

Which of the following is true regarding the Federal Reserve's operating independence?

I. The Fed is restricted by congressional laws and oversight

II. The Fed is not dependent upon congress for its operating budget

III. The Fed is regulated by the Federal Deposit Insurance Corporation

Select one:

a. I only The Fed is a quasi-government agency with significant autonomy

b. I and II only

c. I and III only

d. I, II, and III

34.

Which of the following statements is true concerning market interest rates?

I. Market interest rates are highly correlated with economic activity

II. Market interest rates are very responsive to changes in the fed funds rate

III. Market interest rates are controllable by changing the monetary aggregates

Select one:

a. I only

b. I and II only

c. I and III only

d. I, II, and III