The Federal Reserve System

What is the main job of the Federal Reserve?

• To collect taxes for the government.
• To oversee international trade agreements.
• To manage the country's monetary policy.
• To regulate the stock market.

1. When was the Federal Reserve System created?

• November 11, 1918
• July 4, 1776
• December 23, 1913
• January 1, 1900

1. How many regional Federal Reserve Banks are there in the U.S.?

• 12
• 10
• 15
• 8

1. Who is in charge of setting interest rates in the Federal Reserve System?

• Federal Reserve Bank Presidents
• Department of Treasury
• Board of Governors
• Federal Open Market Committee (FOMC)

1. What is one tool the Federal Reserve uses to control inflation?

• Increasing government spending
• Lowering taxes
• Implementing price controls
• Adjusting the federal funds rate

What are the three functions of the Federal Reserve?

• Setting tax rates for individuals
• Conducting monetary policy, supervising and regulating banks, providing financial services.
• Issuing government bonds
• Managing international trade agreements

What is the definition of Monetary Policy?

• Monetary policy is the process of setting fiscal budgets for government departments.
• Monetary policy refers to government spending and taxation decisions.
• Monetary policy is the regulation of trade tariffs and import quotas.
• Monetary policy is the process by which a central bank manages the money supply and interest rates to influence economic activity.

What occurs in a bank panic?

• A rise in stock market investments.
• A sudden rush of withdrawals from a bank by its customers.
• An increase in bank loans issued.
• A decrease in bank interest rates.

Why was the Federal Reserve first created?

• To increase government control over the economy.
• To provide stability to the U.S. financial system.
• To promote international trade agreements.
• To regulate the stock market more strictly.

Why does the Federal Reserve perform on-site examinations of banks?

• To increase bank profits and shareholder value.
• To conduct customer satisfaction surveys.
• To ensure safety, compliance, and sound risk management in banks.
• To promote new banking technologies and innovations.