Money Banking and the Federal Reserve

In addition to monitoring banking & economic conditions, what are some of the functions of the Federal Reserve System?

• banking services for the gov't, issuing currency, raising/lowering taxes

• raising the debt ceiling, setting the discount rate, issuing currency

• setting the discount rate, regulating banks, regulating gov't spending

• banking services for the gov't, buying/selling US bonds, issuing currency

The FED increases/decreases the nation’s money supply in order to meet the 3 main government economic goals. These goals are

• decrease in prices, full employment, reduction in gross domestic product

• stable prices, full employment, economic growths

• consistent prices, regulation of the stock market, reduce gov't spending

• increase in prices, full unemployment, economic growth

What is the Federal Reserve System?

• the central banking system of the United States.

• a government office for regulating the budget of the United States of America.

• the banking system of the southeast

• the office that controls tax rates and government spending

Influencing the economy by changing the reserve requirement is called:

• Fiscal policy

• Monetary policy

• Tight Money

• Easy Money

The Federal Reserve System was established in

• 1799

• 1913

• 1863

• 1881

The primary role of the Federal Reserve Bank is to steer the economy by

• controlling the budget

• setting spending levels.

• controlling the money supply.

• loaning out money.

In a recession, the Fed would likely

• Increase the supply of money in the economy

• Decrease the supply of the money in the economy

The FED's open market operations refers to

• changing the interest rate on loans

• paying member banks interest on the money they hold in reserve

• The buying or selling of bonds

• raising or lowering the discount rate

The FRS uses tight money policy tools in the _______ and _______ phases of the business cycle.

• contraction & trough

• peak & trough

• expansion & contraction

• peak & expansion

Which of the following actions by the FRS is most likely to increase the money supply?

• selling government bonds in open market operations

• decreasing the discount rate

• increasing interest on reserves

• increasing reserve requirements