Economic Performance and the FED

Why is currency preferable to bartering?

• The relative value of goods is difficult to establish in a barter system.

• It has been proven that bartering does not work.

• The relative value of bartered goods remains the same over time.

• The value of money fluctuates, relative to services.

Which is necessarily true about money?

• It is made of paper

• It is backed by gold

• It is a store of value

• It has value because a dictator said so

Why do people hold more cash during a financial panic?

• They want to speculate in junk bonds

• They have less trust in financial institutions

• They have more confidence in high risk stocks

• low interest rates

Why might the Federal Reserve DECREASE the money supply?

• to heat up the economy

• to encourage businesses to expand

• it results in lower interest rates

• to reduce inflation, or even cause deflation

Which of these is a function of the FED?

• advise the president

• supervise and regulate banks

• advertise for banks

• provide insurance for bank deposits, up to $250,000

Banks were closely regulated during this era.

• 1933 - 1960

• 1776 - 1812

• 1849 - 1865

• 2000 - 2006

Which of these led to a "crisis" in American banking?

• the gold standard

• regulation of interest rates

• subprime mortgages

• the creation of the FED

What is a disadvantage of using paper checks, or "cheques"?

• banks won't process them

• they are no longer legally recognized

• they take time to clear

• they vary in value from one state to another

She was the first woman to be the "chairman" of the FED. Now she's in charge of the Treasury.

• Hillary Clinton

• Condoleezza Rice

• Ruth Bader Ginsburg

• Janet Yellen

There are ___ district banks under the Federal Reserve

• 3

• 7

• 12

• 50