Money and Banking

The Federal Reserve System is

• the world central bank

• the U.S. central bank

• a place stocks and bonds are sold

• all of the above

The Federal Reserve System is often called

• The System

• Supreme Fed System

• The FED

• all of the above

The Fed's key function is to

• make sure the nation's banking system is sound and safe

• maintain an effective payment system for banks and government

• promote a healthy economy by using monetary policy

• all of the above

An important job of the Federal Reserve is to

• protect the nation

• manage and control the money supply

• make sure all goods are safe

• All of the above

When the Federal Reserve wants to encourage the economy to grow, what does it do with the money supply?

• increase the money supply

• decrease the money supply

• sell all of its assets

• issue more government securities

Major economic crises such as the Great Depression of the 1930's, led to expansion of the Fed's role in the U.S. banking system and with managing the U.S. economy.

• true

• false

Which of the following is a function of money?

• acceptability

• medium of exchange

• portability

• relatively scarce

Which function of money encourages people to save money?

• Medium of Exchange

• Store of Value

• Unit of Account

• Acceptability

Trade is made easier because of this function of money that eliminates the need to barter (trade goods for goods).

• Store of Value

• Medium of Exchange

• Unit of Account

• Divisibility

Money must be able to withstand the wear and tear of many people using it.

• Divisibility

• Durability

• Limited Supply

• Acceptability