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WorksheetsMoney, The Fed and Monetary Policy
Total questions: 23
Worksheet time: 40mins
Name
Class
Date
1.
Which group on the Federal Reserve organization chart decides whether to raise or lower interest rates?
a)
Federal Open Market Committee
b)
Board of Governors
c)
Federal Advisory Council
d)
Federal Reserve Banks
2.
The president of the United States appoints members of which group on the Federal Reserve organization chart?
a)
Federal Open Market Committee
b)
Federal Advisory Council
c)
Board of Governors
3.
Members of which group on the Federal Reserve organization chart must buy stock in a Federal Reserve bank?
a)
Board of Governors
b)
Federal Advisory Council
c)
Federal Open Market Committee
d)
Member Banks
4.
What dollar amount should appear in place of the letter P in the table?
a)
$1,000,000
b)
$100,000
c)
$1,900,000
d)
$1,900
5.
What dollar amount should appear in place of the letter S in the table?
a)
$200,000
b)
$1,800,000
c)
$2,200,000
d)
$1,800
6.
Money that has an alternative use as an economic good is
a)
commodity money
b)
specie
c)
fiat money
d)
wampum
7.
Money loses its value when it
a)
It becomes too plentiful
b)
becomes too portabale
c)
is divisible
d)
is durable
8.
Which of the following results should be included where the question mark appears in the illustration?
a)
the reserve requirement
b)
interest rate
c)
inflation
d)
unemployment
9.
Which of the following results should be included where the question mark appears in the illustration?
a)
unemployment
b)
inflation
c)
consumer spending
d)
production
10.
What amount should replace the X in the table?
a)
$1,000
b)
$100,000
c)
$1,000,000
d)
$10,000
11.
What percentage should replace the Y in the table?
a)
20%
b)
5%
c)
10%
15%
15%
d)
2%
12.
Which items on the graph are part of M1?
a)
currency and savings deposits
b)
currency, traveler’s checks plus demand deposits, and other checkable deposits
c)
other checkable deposits, money market mutual funds, and small time deposits
d)
currency, savings deposits, and small time deposits
13.
The Fed's Federal Open Market Committee
a)
advises the Fed on the overall health of the economy.
b)
is the Fed's primary monetary policymaking body.
c)
advises the Fed on consumer credit laws.
14.
Unlike many politicians, the Fed
a)
must respond to pressure from the public.
b)
is concerned about short-term interest rates.
c)
is concerned about the long-run health of the economy.
15.
Liabilities are
a)
reserves a bank must set aside.
b)
debts and obligations.
c)
the same as net worth.
16.
The Federal Reserve
a)
is made up of 12 district banks and 25 branch banks.
b)
is managed by a 12-member board of directors.
c)
is made up of district banks that operate independently from one another.
17.
Because Russian currency is not trusted, real money plays a fairly small part in Russia’s economy today. Most business is conducted by barter or with IOUs. For example, workers rarely receive wages in the form of cash. A bicycle factory outside the city of Perm pays its workers in bicycles! To get cash, the workers have to sell their “paychecks.” More often than not, they simply trade the bicycles for the products they want.
According to the passage, most business in Russia is conducted without currency because Russian currency is not
According to the passage, most business in Russia is conducted without currency because Russian currency is not
a)
divisible
b)
portable
c)
accepted
d)
durable
18.
The Aztec in Central America used cacao beans, from which chocolate is made, as money. Prices varied from a few beans for a piece of fruit to several thousand for an enslaved person.
Aztec merchants had to take care when selling expensive items. Payment usually came stored in sacks, and the sacks might contain counterfeit money—bean husks filled with mud.
Based on the passage, what type of money did the Aztec use?
Aztec merchants had to take care when selling expensive items. Payment usually came stored in sacks, and the sacks might contain counterfeit money—bean husks filled with mud.
Based on the passage, what type of money did the Aztec use?
a)
specie
b)
fiat money
c)
legal tender
d)
commodity money
19.
As a result of the financial institution crisis of the 1980s, S&Ls are now insured by the
a)
FSLIC
b)
FDIC
c)
Fed
d)
National Banking System
20.
The Federal Reserve System was established in
a)
1799
b)
1913
c)
1863
d)
1881
21.
In order for money to have value, it must have all of the following characteristics EXCEPT
a)
portability.
b)
durability.
c)
divisibility.
d)
plentiful availability.
22.
Local banks in the 1800s that printed too much money were called
a)
central banks
b)
wildcat banks
c)
national banks
23.
In taking the actions described in the passage, the Fed was trying toFederal Reserve policymakers cut their short-term interest rate target an aggressive half-point to 2% Tuesday.... This cut was the Fed’s 10th attempt this year to shore up the U.S. economy, which is still weakening after the Sept. 11 attacks. The moves represent some of the most furious rate-cutting in Fed history.... Fed officials have now pushed the rate banks charge each other for overnight loans to its lowest level since 1961....
Major banks lowered the prime rate in [lockstep] with the Fed, bringing it down to 5% from 5.5%. That translates into lower rates for home-equity loans, business loans, and some credit cards.
In taking the actions described in the passage, the Fed was trying to
Major banks lowered the prime rate in [lockstep] with the Fed, bringing it down to 5% from 5.5%. That translates into lower rates for home-equity loans, business loans, and some credit cards.
In taking the actions described in the passage, the Fed was trying to
a)
increase the amount banks keep on reserve.
b)
decrease the money supply.
c)
increase business activity.
d)
decrease business activity.
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