QUESTION 1

To increase lending capacity the Fed does all the following except:

1. reduces the required reserve ratio
2. increases the discount rate
3. buys bonds
4. all of the above

QUESTION 2

The Federal Reserve's three monetary tools are all except:

1. reserve requirement
2. discount rate
3. open market operation
4. tax policy

QUESTION 3

The FDIC (Federal Deposit Insurance Corp) was created in the 19_.

1. 20's
2. 30's
3. 40's
4. 50's

QUESTION 4

To decrease lending capacity the Fed:

1. reduces required reserves ratio
2. reduces discount rate
3. buys bonds
4. sells bonds

QUESTION 5

To quell a bank run, FDR mandated a _ day "bank holiday".

1. 1
2. 5
3. 10
4. 20

QUESTION 6

Deposit to bank A = $600 and required reserves = .25 then cumulative change in transaction deposits = $:

1. 480
2. 600
3. 2400
4. 3000

QUESTION 7

Deposit to bank A = $100 and deposit to bank B = $80, then:

1. required reserves = .2
2. deposit to bank C = $60
3. cumulative change in transaction deposits = $320
4. all of these

QUESTION 8

The Required Reserves amount =:

1. deposits*required reserve ratio
2. required reserves/deposits
3. deposits-loans
4. deposits-excess reserves
5. a&c

QUESTION 9

Transaction accounts include all the following except:

1. NOW accounts
2. ATC accounts
3. checking accounts
4. credit union share drafts
5. treasury bonds

QUESTION 10

Deposit to bank A = $100 and deposit to bank B = $90, then

1. required reserves = .1
2. deposit to bank C = $81
3. cumulative change in transaction deposits = $1000
4. all of these

QUESTION 11

Deposit to bank A = $600 and required reserves = .4 then cumulative change in transaction deposits = $:

1. 240
2. 360
3. 900
4. 1500

QUESTION 12

If three apples equal two oranges and two oranges equal one mango . . . such can be avoided by using money as a:

1. common unit of measure
2. store of value
3. medium of exchange
4. portable unit

QUESTION 13

Belowthe districts, the Federal Reserve has _ branches.

1. 4
2. 12
3. 25
4. 50

QUESTION 14

A bond is sold for $500 and pays $50 each year in interest without any maturity date in sight. The yield is _ %.

1. 1
2. 5
3. 10
4. 20

QUESTION 15

The Federal government began issuing money during the _ War.

1. Revolutionary
2. Civil
3. First World
4. Second World

QUESTION 16

The Federal Reserve's primary functions include all except:

1. issue money
2. clearing checks
3. holding bank reserves
4. lending to banks
5. advertising for banks

QUESTION 17

Medium of exchange means:

1. average shipment
2. something to convert all else into
3. location of a market
4. size limits

QUESTION 18

When money is deposited in a bank, most of this deposit is in turn:

1. held in a bank'svaults
2. held by the Federal Reserve
3. taxed by gov.
4. lent to a third party

QUESTION 19

Transaction accounts enable direct:

1. payment to third parties
2. deposit
3. reporting back to depositors
4. tracking by government

QUESTION 20

Deposit to bank A = $400 and required reserves = .5 then cumulative change in transaction deposits = $:

1. 100
2. 200
3. 800
4. 1600