Question 5

What does it mean to have a Fractional Reserve Banking System?

a. Banks are financial intermediaries

b. Prices are a fractional representation of an item's worth

c. Currency is only money because the Fed says so

d. Banks hold a fraction of deposits on reserve

Question 8

Which of the following is NOT included in the Fed's power?

a. Being a lender of last resort

b. Setting the Reserve requirements

c. Buying and selling bonds

d. Investigating the Treasury dept.

Question 9

Which of the following describes the office of the chairman of the Fed?

a. Appointed by the president

b. 14 year non-renewable term

c. Term expires every even numbered president

d. all of the above

Question 11

To engage in expansionary monetary policy the Fed might do which of the following?

a. Buy bonds

b. Raise the Discount Rate

c. Sell bonds

d. Lower the Federal Funds Rate