Central banks can increase the money supply to curb inflation.

TrueFalse

Why we need central banks?

A multiple-choice question with several possible answers.

1. The banking system need a lender of ready cash to provide liquidity to banks and to protect the stability of financial system
2. High failure rate of banks
3. A new national check-clearing system is needed

Which of the following statements are true regarding the early structure of the Fed.

A multiple-choice question with several possible answers.

1. Discounted rate was chief monetary policy
2. A centralized central bank
3. Each federal reserve bank can not issue its own banknotes
4. Discounted rate was not chief monetary policy
5. A decentralized central bank
6. Each federal reserve bank can issue its own banknotes

9. After the U.S. government issued large amounts of bonds, _________ becomes an important monetary policy.

A multiple-choice question with one possible answer.

1. Reserve requirement
2. Discounted rate
3. Open market operations