4 The Federal Reserve System

The Federal Reserve act was signed into law by then president Woodrow Wilson in...

• 1865

• 1913

• 1917

• 1930

To much money in our economy leads to

• Inflation

• Recession

• Increasing

• Receding

The Federal Reserve...

• Regulates the amount of money in circulation

• Supervises banks

• Provides financial services to banks and the public

• All of the above.

The amount of deposits that banks are required to keep on hand is called...?

• monetary policy

• money creation

• reserve requirements

• prime rate

The interest rate that the Federal Reserve charges commercial banks for Overnight loans is called the...?

• discount rate

• monetary policy

• inside lag

• tight money policy

The Fed refers to the....

• Federal Bureau of Investigation

• Federal Government

• Federal Reserve

• Federal Income Tax

Because it has no inherent value, a piece of U.S. currency is an example of...?

• Commodity Currency

• Representative Currency

• Fiat Currency

• Public Currency

How many regional Reserve Banks make up the Federal Reserve System?

• 12

• 6

• 22

• 50

Which statement below is true?

• The Federal Reserve is NOT a federal agency and serves at the pleasure of Congress.

• The Federal Reserve is a federal agency and is immune from the whims of Congress.

• The Federal Reserve answers only to the president

• The Federal Reserve is actually a division of the U.S. Postal Service making stamps and fancy envelopes.

The 12 regionally located reserve banks...

• Assists the U.S. Treasury by distributing currency, provides overnight loans to commercial banks, and processes electronic payments.

• Handle all deposits made by federal employees.

• Store 1/12 of the gold used to support the value of the the U.S. dollar.

• Visit other countries to study their banking system looking for opportunities to improve.