1. Go tohttp://research.stlouisfed.org/publications/ and go to Page One Economics. Scroll down and click on the publication "Independence, Accountability, and the Federal Reserve System". Read the 5-page article and answer the following:

a. The first section describes policy events that we will discuss later in the semester. Go to the second section and how and why the Federal Reserve maintains a degree of independence from the political branches of government.

b. From the third section, state which part of the Federal Reserve is representative of national interests and which part is representative of regional interests.

c. From the fourth section, describe the difference between how Fed governors are put into their positions versus how District Bank presidents are put into their position. Which is most closely tied to the political process?

d. From the final section, state the ways in which the Fed is accountable to Congress.

2. Write out a simple balance sheet for a bank. State the three ways in which a bank's assets can generate revenue, and rank those assets according to their riskiness.