Money and the Federal Reserve System Quiz

What is the narrowest definition of the money supply?

• Savings accounts and currency

• Stocks and bonds

• Currency and checkable bank deposits

• Commodity money and fiat money

Which of the following is NOT a function of money? a. Medium of exchange b. Store of value c. Unit of account d. Means of production

• c

• d

• b

• a

What type of money has intrinsic value in other uses? a. Commodity money b. Backed commodity money c. Fiat money d. Reserve money

• a

• c

• b

• d

What is the highest reserve requirement percentage in the US?

• 20%

• 15%

• 10%

• 5%

What is the process of loans and deposits called? a. Money creation b. Money destruction c. Money circulation d. Money conservation

• b

• a

• d

• c

What is the main function of the Federal Reserve System? a. Provide financial services b. Conduct monetary policy c. Supervise & regulate banking institutions d. All of the above

• b

• a

• c

• d

How many members serve in the Federal Open Market Committee (FOMC)?

• 5

• 7

• 10

• 12

What does the Federal Reserve use to buy or sell U.S. Treasury bills from commercial banks? a. Reserve requirements b. The Discount Rate c. Open Market Operations d. Excess Reserves

• a

• b

• d

• c

What does the Federal Reserve sell in an open market operation (OMO)?

• Gold

• Stocks

• Treasury bills

• Bonds

Who is always on the Federal Open Market Committee (FOMC)?

• The President of the United States

• The Secretary of the Treasury

• The Chair of the Board of Governors

• The Federal Reserve Bank of New York president