Federal Reserve System Quiz

What was the primary reason for the creation of the Federal Reserve System?

• To unify the monetary interests of the United States

• To create more banks

• To increase taxes

• To reduce government spending

What act led to the creation of the Federal Reserve System?

• The Federal Reserve Act of 1913

• The Banking Act of 1933

• The Monetary Control Act of 1980

• The Financial Services Act of 1999

How many districts does the Federal Reserve System divide the country into?

• 12

• 10

• 15

• 8

Who appoints the members of the Board of Governors of the Federal Reserve System?

• The President

• The Senate

• The House of Representatives

• The Supreme Court

What is the primary tool used by the Federal Open Markets Committee (FOMC) to control the money supply and credit conditions?

• Open Market Operations

• Interest Rate Adjustments

• Tax Policies

• Government Spending

"The Fed" refers to the....

• Federal Bureau of Investigation

• Federal Government

• Federal Reserve System/Bank

• Federal Income Tax

The discount rate is the interest rate the Fed charges on loans to:

• consumers.
• the federal government.
• state governments.
• banks.

To _______ the money supply, the Fed could ________.

• increase; lower the reserve requirements
• decrease; lower the discount rate
• increase; raise the federal funds rate
• decrease; conduct open-market purchases

What happens to the money supply when the Fed lowers the discount rate?

• Expands
• Contracts

One primary function of the Federal Reserve system is to

• regulate stock market trading

• preserve fair competition

• keep deflation low and steady

• act as a central bank of the United States