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Money, Fed, Monetary Policy (new GA standards)

Total questions: 57

Worksheet time: 19mins

Name
Class
Date
1.
Money must be easy to carry. 
a)
Durability
b)
Divisibility
c)
Store of Value
d)
Portability
2.
Which function of money encourages people to save money?
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Acceptability
3.
Money that has value because the Government declared that it is money.
a)
Fiat Money
b)
Commodity Money
c)
Currency
d)
Coins
4.

Money must be widely recognized by both parties before an exchange for goods or services happens.

a)

Divisibility

b)

Acceptability

c)

Limited Supply

d)

Store of Value

5.
Money must be scarce.
a)
Limited Supply
b)
Medium of Exchange
c)
Store of Value
d)
Fiat Money
6.

Money that has a value as something other than money.

a)

Fiat Money

b)

Commodity Money

c)

Currency

d)

Coins

7.
Money must be easily divided into small parts so that people can purchase goods and  services at any price.
a)
Divisibility
b)
Uniformity
c)
Acceptability
d)
Durability
8.

Money must be able to withstand the wear and tear of many people using it.

a)

Divisibility

b)

Durability

c)

Limited Supply

d)

Acceptability

9.
Trade is made easier because of this function of money that eliminates the need to barter (trade goods for goods).
a)
Store of Value
b)
Medium of Exchange
c)
Unit of Account
d)
Divisibility
10.

Trading for things with other goods is called

a)

money

b)

stealing

c)

bartering

d)

negotiating

11.

What is a fiat currency?

a)

Currency backed by a gold standard

b)

A currency used to purchase a car

c)

A currency backed by a physical commodity

d)

A currency that is declared a currency by the government, although not backed by a physical commodity

12.
Money used to for exchange of goods and service describes which basic function of money?
a)
Medium of exchange
b)
Store of value
c)
Unit of account
d)
Standard of deferred payments
13.
Money saved and used in the future describes which basic function of money?
a)
Medium of exchange
b)
Store of value
c)
Unit of account
d)
Standard of deferred payments
14.

Before people had money they _____.

a)

bartered

b)

shared

c)

texted

d)

shopped

15.

For something to be an effective medium of exchange it should be: scarce, durable, portable and _____.

a)

divisible

b)

popular

c)

paper

d)

expensive

16.

Dollar bills are made of _____.

a)

cotton and linen

b)

paper mache

c)

polyester

d)

cotton candy

17.
Who is on the $20 bill?
a)
Andrew Jackson
b)
George Washington
c)
Barack Obama
d)
Benjamin Franklin
18.

What happens to the money supply when people hoard money (put it under the mattress or in the freezer)?

a)

Remains stable

b)

Increases

c)

Decreases

19.

Which of the following is an example of representative money?

a)

silver certificates

b)

wampum

c)

cattle

d)

US currency

20.

Engravers at the US Mint only know how to do one specific part of the engraving process ..... on purpose.

a)

True

b)

False

21.
The Central bank of the US is called
a)
the Federal Reserve
b)
Government Reserve
c)
National Reserve
d)
State Reserve
22.
The board of seven appointed members who surpervise the operations of the Fed and set policy is called the
a)
Board of Bankers
b)
Board of Governors
c)
Board of Regulators
d)
Board of Trustees
23.
Which action increases the money supply?
a)
the Fed BUYS bonds on the market
b)
the Fed raises the discount rate
c)
the federal gov. decreases government spending
d)
the federal gov. increases personal income taxes
24.
The interest rate the Fed charges other banks
a)
discount rate
b)
monetarism
c)
prime rate
d)
open market operations
25.
Contractionary monetary policy is sometimes called
a)
decreasing money policy
b)
saving money policy
c)
slow money policy
d)
tight money policy
26.
A plan to increase the amount of money in circulation
a)
open market operations
b)
expansionary policy
c)
contractionary  policy
d)
monetarism
27.
Expansionary monetary policy is sometimes called
a)
circulation money policy
b)
easy money policy
c)
lending money policy
d)
money flow policy
28.

What is the purpose of the Federal Reserve System?

a)

to store the gold and silver reserves that back the US currency

b)

to provide federal insurance to safeguard the deposits in the banks

c)

to make loans to banks, issue currency, and regulate the money supply

d)

to deregulate banks and savings and loans instituitons

29.
The primary role of the Federal Reserve Bank is to steer the economy by
a)
controlling the budget
b)
setting spending levels.
c)
controlling the money supply.
d)
loaning out money.
30.
Monetary Policy is controlled by
a)
Congress
b)
The President
c)
The Legislative Branch
d)
The Federal Reserve Bank
31.
The Federal Open Market Committee buys and sells government securities in order to control the money supply.
a)
TRUE
b)
FALSE
32.
You want a new truck. How can the Federal Reserve's raising of the discount rate affect your decision to purchase the truck?
a)
It will raise interest rates and make your truck payment lower
b)
It will lower interest rates and make your truck payment higher
c)
It will lower interest rates and make your truck payment lower.
d)
It will raise interest rates and make your truck payment higher.
33.
Federal Reserve Board of Governor members are appointed by the _____ and confirmed by the _____
a)
Treasury; Congress
b)
Federal Reserve presidents; Treasury
c)
Public; House of Representatives
d)
President; Senate
34.
Federal Reserve Board of Governor members serve _____ terms to help insulate them from political influence.
a)
25 year
b)
14 year
c)
7 year
d)
Lifetime
35.
Inflation is a sustained increase in the general level of _____.
a)
Income
b)
Profit
c)
Prices
d)
Accounts
36.
Which of these is NOT a monetary policy tool?
a)
Balance Accounts
b)
Discount Rate
c)
Reserve Requirements
d)
Open Market Operations
37.
The Fed keeps a certain amount of money out of circulation. This is referred to as....
a)
Reserve requirement
b)
Emergency Fund
c)
Stockpile
d)
Hoard
38.
How many Federal Reserve District banks are there?
a)

12

b)
9
c)
6
d)
5
39.
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
40.
How could the Federal Reserve encourage banks to lend out more of their reserves?
a)
reduce the discount rate
b)
raise the required amount of reserve
c)
increase the prime rate
d)
reduce the money supply
41.
The Federal Reserve would do which of the following in order to expand the economy?
a)
sell bonds
b)
raise the discount rate
c)
buy bonds
d)
raise the reserve requirement
42.
Which of the following is a monetary policy action used to combat a recession?
a)
cutting taxes
b)
increasing the money supply
c)
decreasing the money supply
d)
raising taxes
43.
Which of the following is not a function of the Federal Reserve System?
a)
To control the money supply.
b)
To supervise and regulate banks.
c)
To aid in the check clearing process.
d)
The fed does all of these.
44.
A bank's "required reserves" are:
a)
held as deposits with the Federal Reserve System.
b)
equal to its checkable deposits.
c)
equal to its transactions deposits.
d)
none of these.
45.
Assume a bank has total deposits of $100,000 and $10,000 is set aside to meet reserve requirements of the Fed. Its required reserve ratio is:
a)
$10,000
b)
10%
c)
0.1%
d)
1%
46.
Which of the following is an appropriate monetary policy if the Fed wants to increase the money supply?
a)
An increase in the required reserve ratio.
b)
An increase in the discount rate.
c)
Purchases of bonds in open market operations.
d)
Higher taxes on interest income.
47.
What interest rate does a bank pay when it borrows reserves from the Fed?
a)
The discount rate.
b)
The prime rate.
c)
The federal funds rate.
d)
The required reserve rate.
48.
Which of the following policy actions by the Fed would cause the money supply to decrease?
a)
An open-market purchase.
b)
A decrease in required reserve ratios.
c)
An increase in the discount rate.
d)
None of these.
49.
Does increasing the money supply cause inflation or deflation?
a)
Inflation
b)
Deflation
50.
What happens to the money circulation, when the FED orders a tight money policy?
a)
more money is put out into circulation
b)
less money is put into circulation
c)
circulation stays the same
d)
interest rates rise
51.

We are in a recession. Factory orders are down, and the economy appears to be slumping. What should the Fed do?

a)

Tight Money

b)

Easy Money

c)

Do Nothing

52.

Unemployment is low and prices are rising steadily. What should the Fed do?

a)

Tight Money

b)

Easy Money

c)

Do Nothing

53.
The Federal Reserve uses ______ to regulate the economy.
a)
Monetary Policy
b)
Fiscal Policy
54.

Our regional Federal Reserve bank is located in

a)

Atlanta

b)

Mobile

c)

Savannah

d)

Montomery

55.
The Board of Governors is appointed by the
a)
vice president
b)
president
c)
Fed
d)
state governors
56.

Which is a goal of the Federal Reserve?

a)

Create a high level of inflation

b)

Create price stability in the economy

c)

Print currency for American citizens

d)

Develop fiscal policy for the United States

57.
The primary role of the Federal Reserve Bank is to steer the economy by
a)
controlling the budget
b)
setting spending levels.
c)
controlling the money supply.
d)
loaning out money.

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