The Federal Reserve

"The Fed" refers to the....

• Federal Bureau of Investigation

• Federal Government

• Federal Reserve System

• Federal Income Tax

What does Inflation do to the value of money?

• Makes it go up.
• Makes it go down.
• Makes it stay the same.

Increasing the money supply can led to   

• inflation
• a depression

The primary role of the Federal Reserve Bank is to steer the economy by

• controlling the budget
• setting spending levels.
• controlling the money supply.
• loaning out money.

A recession has been going on for a long time.  What will the Fed do to strengthen the economy?

• Increase the supply of money in the economy
• Decrease the supply of the money in the economy

If the economy is expanding too quickly, the Federal Reserve will institute which type of monetary policy?

• Expansionary
• Contractionary
• Equanimitous
• Whole Dollar

Why does the Fed go to a tight money policy when the economy is expanding too quickly?

• to make loans easy and cheap
• to control inflation
• to encourage businesses to hire more people
• they want people to spend more money

What is the percentage of deposits that the Fed requires banks to hold back and not lend out

• Fed Fund Rate
• Reserve Requirement Rate
• Discount Rate
• I.O.U Rate

The interest rate the Fed charges commercial banks for loans

• Fed Fund Rate
• Reserve Requirement Rate
• Discount Rate
• I.O.U Rate

The % of deposits that are NOT part of the reserve requirement

• goes to the Feds to invest.
• are available to loan out
• are kept in the vault 
• is much less than the % in RR