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WorksheetsFederal Reserve, Money, and Interest (B3&4)
Total questions: 43
Worksheet time: 22mins
A decrease in the money supply often causes prices to rise.
True
False
The idea that money is created through loans
butterfly effect
multiplier effect
banking effect
money effect
Board of Governor's member serve for how long?
4 years
10 years
14 years
lifetime
Which law prohibits bill collectors from using deceptive or abusive tactics?
Truth in Lending Act
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Debt Collection Practices Act
District Reserve Banks are spread out over how many regions?
10
12
14
15
Which action would help stimulate the economy?
raising taxes
lowering taxes
Which action would help stimulate the economy?
lowering interest rates
raising interest rates
Most financial transactions at a bank involve the physical movement of large amounts of cash.
True
False
The value of the US dollar is backed up by what commodity?
gold
silver
diamonds
none of these
Which law gives consumers three days to change their mind about a loan?
Truth in Lending Act
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Debt Collection Practices Act
When interest rates are high, banks make more money and the economy grows quickly.
True
False
Which of the following is NOT a function of the Federal Reserve?
loaning money to member banks
serving as the government's bank
taxing state bank notes
supervising and regulating bank operations
The interest rate that the Federal Reserve sets and charges for loans to member banks
prime rate
discount rate
Federal funds rate
fiscal rate
The interest rate charges for short-term, interbank loans
prime rate
discount rate
Federal funds rate
inter-bank rate
The lowest interest rate that banks charge their best and most reliable business customers
prime rate
discount rate
Federal funds rate
market rate
What is the correct order of the structural levels on the Fed (from top to bottom)?
board of governors, district reserve banks, member bank, chair
chair, member banks, district reserve banks, board of governors
member banks, district reserve banks, chair, board of governors
chair, board of governors, district reserve banks, member banks
If there is too much money moving in the economy, what will likely happen?
The Fed will likely lower interest rates
Prices will likely rise, causing inflation
Prices will likely fall, causing many businesses to go bankrupt
The government will likely lower taxes
If the Fed sells US government securities, what is the expected result on the money supply?
There will be an increase in the amount of money available in the economy.
There will be a decrease in the amount of money available in the economy.
Which of the following is the MOST liquid?
a certificate of deposit that matures in 2 months
money saved in your retirement account
money in your checking account
money in your wallet
Which item might be used as currency in a commodity money system?
silver
chickens
sticks
All of these
The US government has complete control over all aspects of the money supply.
True
False
Which is the most common type of currency system used around the world today?
commodity money
fiat money
conventional money
market money
The measure of how quickly things may be converted to cash
liquidity
commodity
multiplier
convertibility
In times of economic downturn, the US can print more money as a way to help stimulate the economy.
True
False
The liquid assets held by banks and individuals
fractional reserve system
multiplier money
money supply
commodity money
Which is a goal of the Federal Reserve?
maintain economic growth
stabilize prices
keep international payments flowing smoothly
all are correct
What is an action the Fed can take to impact monetary policy?
change tax rates
adjust the government's budget
adjust interest rates
all are correct
Which type of policy is easier to make?
monetary policy
fiscal policy
Money that has value by the order of the government
commodity money
market money
fiscal money
fiat money
Money held on reserve at the bank is used for what purpose?
It's invested
It's used to provide loans
It's used to pay bank expenses
It's used when account holders need to make withdrawals.
Who controls monetary policy?
The Fed
Congress and the President
Who controls fiscal policy?
The Fed
Congress and the President
What gives the US dollar value?
The commodity that backs up the value of the dollar
The government's promise
The interest earned by bank's from loans
The Fed works to protect consumers' credit rights.
True
False
The Fed can pass laws to change tax rates.
True
False
A lack of available cash can cause a decline in spending and lead to a(n)
recession loop
inflation cycle loop
adverse feedback loop
stagflation system loop
An adverse feedback loop may cause all of the allowing EXCEPT
a drop in product demand.
increase in available jobs.
a slow in manufacturing.
a decrease in availability of cash.
If you are denied credit, which law requires that a lender provide a copy of the credit report and reason for denial to you.
Truth in Lending Act
Fair Credit Reporting Act
Equal Credit Opportunity Act
Fair Debt Collection Practices Act
All state financial institutions that operate in the US are legally required to become member of the Federal Reserve System.
True
False
What does it mean to stimulate the economy?
make more money available
make less money available
In which situation might the government want to slow down the economy?
high unemployment
high inflation
a decline in spending
a recession
Which law prohibits discrimination as a factor in determining creditworthiness?
Truth in Lending Act
Fair Debt Collection Practices Act
Fair Credit Reporting Act
Equal Credit Opportunity Act
If the reserve requirement is raised, what will likely happen to the money supply?
There will be more money available
There will be less money available
