Question
LESSON 12 1.Choose the correct answer. The seven-member group that administers the Federal Reserve System is called the ___________________. A. Federal Advisory Council B. Federal
LESSON 12
1.Choose the correct answer.
The seven-member group that administers the Federal Reserve System is called the ___________________.
A. Federal Advisory Council
B. Federal Open Market Committee
C. Federal Commerce Board
D. Board of Governors
2.Choose the correct answer.
The system in which a portion of a bank's deposits are held in reserve while the remainder is free to lend is known as _____________.
A. loose money banking
B. tight money banking
C. fractional reserve banking
D. reserve requirement banking
3.In which city is the Board of Governors located?
A. New York, NY
B. Boston, MA
C. Washington D.C.
D. Baltimore, MD
4.What is the main responsibility of the Fed?
A. Raising interest rates to make savings accounts more attractive
B. Advising Congress on laws regarding money
C. Setting U.S. monetary policy
D. Establishing credit with foreign nations
5.How many Federal Reserve districts are there in the United States?
A. 8
B. 10
C. 12
D. 14
6.Study the following.
1. Borrowing is easy
2. Consumers buy more
3. Businesses expand
4. More people are employed
5. People spend more
These are all signs of which of the following?
A. A depression
B. Economic equilibrium
C. A recession
D. Inflation
7.Study the following.
Supervising the district banks
Regulating the activities of member banks and other depository institutions
These are responsibilities of which of the following?
A. The Federal Reserve System
B. The Board of Governors
C. The Chairman of the Board of Governors
D. The US Treasury
(8 is skipped)
9.Which is true of bank membership in the Federal Reserve System?
A. National banks may opt out of joining the Federal Reserve System.
B. State chartered banks must join the Fed or they are considered unconstitutional.
C. Member banks are the owners of their district's Federal Reserve Bank.
D. An institution must become a member to receive Fed services.
10.Using the principle of fractional reserve banking, a 20% reservation requirement would yield how much new money from an original deposit?
A. 20 times
B. 10 times
C. 5 times
D. New money cannot be created from a single deposit.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started