The Central Bank

What is the primary role of the Federal Reserve?

• To regulate the stock market

• To control the total amount of money in circulation

• To issue loans to individuals

• To manage international trade policies

When was the Federal Reserve created?

• 1900

• 1913

• 1929

• 1945

Who appoints the chairperson of the Federal Reserve?

• The Senate

• The President

• The Board of Governors

• The Secretary of Treasury

What does the Federal Reserve issue to banks?

• Loans

• Currency

• Stocks

• Bonds

Why do people accept dollar bills and coins as payment?

• Because they are made of valuable materials

• Because they have confidence in the government

• Because they are backed by gold

• Because they are universally accepted

What is inflation?

• A decrease in the value of money

• An increase in the value of money

• A rise in prices due to too much money circulating

• A fall in prices due to too little money circulating

How does the Federal Reserve ensure the soundness of the banking system?

• By issuing loans to banks

• By sending expert inspectors to banks

• By controlling international trade

• By printing more money

What happens if too much money is circulating in the economy?

• The value of money increases

• Prices start rising

• The banking system collapses

• The government imposes higher taxes

What financial services does the Federal Reserve provide to banks?

• Issuing loans to individuals

• Providing check clearing services

• Managing international trade

• Offering investment advice

What is the relationship between the Federal Reserve and inflation?

• The Federal Reserve causes inflation

• The Federal Reserve works to keep inflation low and stable

• The Federal Reserve ignores inflation

• The Federal Reserve increases inflation to boost the economy