Understanding the Federal Reserve System

Front

What is the Federal Deposit Insurance Corporation (FDIC)?

Back

An independent agency created by the federal government to protect bank customers by insuring their deposits.

Front

What type of money does the US Treasury department produce?

Back

Paper Money.

Front

What does monetary policy affect?

Back

Monetary policy affects the money supply, primarily through changing interest rates.

Front

Who puts US paper currency into circulation?

Back

The Fed.

Front

What function of money is represented by the term 'Unit of Account'?

Back

It is a function of money that provides a standard measure of value.

Front

What is the role of the Federal Reserve?

Back

The Federal Reserve manages the country's monetary policy and regulates banks.

Front

What is a savings account?

Back

A bank account that earns interest on the money deposited.

Front

What is the purpose of insuring bank deposits?

Back

To protect customers' money in case the bank fails.

Front

What is the difference between coins and paper money?

Back

Coins are metal currency, while paper money is printed currency.

Front

What is interest?

Back

The cost of borrowing money, usually expressed as a percentage.