1. The discount rate is the interest rate the Federal Reserve charges for loans to member banks.

   a. True

   b. False

2. In order to meet its reserve requirement, ABC Bank can borrow money from other banks at the federal funds rate.

   a. True

   b. False

3. In an inflationary period, as prices go up, money gains value because it can buy more.

   a. True

   b. False

4. Increasing the reserve requirement is a powerful ____ weapon that reduces the overall supply of money.

   		a. depression
   		b. anti-government
   		c. inflationary
   		d. anti-inflation
   		e. recessionary