Money Banking & the Fed

You pick up a $1 bill. What are you holding?

• currency
• a Federal Reserve note
• fiat money
• all of the above

You can easily carry money in a pocket or purse. This reflects what characteristic of money?

• legal tender
• limited supply
• portability
• durability

Most banks are established 

• as corporations
• by local governments
• to be credit unions
• tofrulfill reserve requirements

Which of the following can cost you money in large interest payments?

• a debit card
• a credit card
• a checking account
• a savings account

Which of these did Pres. Nixon attempt as a way to combat inflation in the early 1970s?

• easy money policy
• tight money policy
• wage-price controls
• open market operations

The buying an selling of government securities in financial markets is an example of

• open market operations
• prime rate
• discount rate
• tight money policy

Which of these results from the implementation of a tigh money policy?

• a decrease in interest rates
• a decrease in the price of credit
• an increase in the price of credit
• an increase in wage-price controls

Which of these is a feature of open market operations?

• The Fed sells government securities
• The Fed lowers the prime interest
• The Fed raises the reserve requirement
• The Fed purchases member bank reserves