WorksheetsThe Federal Reserve & Money Review
Total questions: 35
Worksheet time: 18mins
Name
Class
Date
1.
What are the functions of money?
a)
To serve as a medium of exchange, a unit of account, and a store of value
b)
To control prices, create jobs, and set government policies
c)
To replace banks, eliminate taxes, and stop inflation
d)
To measure population growth, track weather, and predict the future
2.
What are the characteristics of money?
a)
Durable, portable, divisible, stable, scarce, and acceptable
b)
Digital, divisible, rare, and difficult to copy
c)
Heavy, permanent, government-owned, and limited in supply
d)
Easy to destroy, unlimited, unique, and hard to recognize
3.
Who is largely responsible for ensuring that people continue to trust that our currency is valuable?
a)
Individual banks and credit unions
b)
Private businesses and corporations
c)
The Federal Reserve
d)
US Congress
4.
When discussing the characteristics of money, what is meant by scarce?
a)
The supply of money is controlled and limited to help maintain its value
b)
Money becomes less useful as more people earn higher incomes
c)
The value of money depends entirely on consumer spending habits
d)
Money is difficult to produce because of high material costs
5.
What is the Federal Reserve?
a)
The central banking system of the United States that manages the money supply and monetary policy
b)
A private organization that loans money directly to consumers
c)
A branch of Congress responsible for regulating monetary policy
d)
An international bank that controls money for all countries
6.
What makes the Federal Reserve a decentralized bank?
a)
It is made up of multiple regional Federal Reserve Banks across the country rather than one single central bank.
b)
It allows individual commercial banks to create their own national monetary policies.
c)
It operates independently from all government oversight and regulation.
d)
It is owned and controlled entirely by consumers.
7.
What does the Federal Reserve do?
a)
Regulates the money supply, sets monetary policy, and works to promote a stable financial system
b)
Prints all U.S. paper money and coins and distributes it directly to the public
c)
Creates the federal budget and decides how tax money is spent
d)
Approves loans for individuals and businesses across the country
8.
What are the monetary policy goals of the Federal Reserve?
a)
To promote maximum employment, stable prices, and moderate long-term interest rates
b)
To eliminate inflation entirely and guarantee full employment
c)
To control wages, prices, and profits in the private sector
d)
To balance the federal budget and reduce the national debt
9.
How many regional Reserve Banks are in the United States?
a)
8
b)
10
c)
12
d)
14
10.
The Federal Open Market Committee makes decisions on how ________________ policy should be managed.
a)
fiscal
b)
governmental
c)
monetary
d)
treasury
11.
The Federal Reserve has a seven member Board of Governors. What is their primary function?
a)
Supervising and examining commercial banks
b)
Distributing currency and coin to banks and to the public
c)
Setting policy direction for the Federal Reserve System
d)
Operating electronic payments systems
12.
The Federal Open Market Committee (FOMC) has a primary focus which is
a)
supervising the 12 Federal Reserve Banks
b)
distributing currency and coint to the publi
c)
governing the Federal Reserve System
d)
promoting maximum employment and price stability
13.
Where is the Board of Governors located?
a)
Washington, DC
b)
Atlanta
c)
Philadelphia
d)
New York
14.
How many times a year does the FOMC meet?
a)
8
b)
10
c)
12
d)
14
15.
When a bank comes to the Federal Reserve to obtain credit, what must they be able to provide?
a)
Collateral
b)
Charter
c)
Business Plan
d)
Loan approvals
16.
Where does the Federal Reserve get their funding?
a)
From interest earned on government securities and fees for services it provides to banks
b)
Directly from Congress through the federal budget
c)
From taxes paid by U.S. citizens
d)
From private businesses and corporations
17.
When the Federal Reserve provides information to the US Public through speeches, minutes, press conferences, released statements, congressional testimonies, and an explicit long-term inflation target, they are trying to promote what?
a)
Transparency
b)
Liquidity
c)
Political support
d)
Market manipulation
18.
Who is the current chair of the Board of Governors?
a)
Jerome Powell
b)
Philip Jefferson
c)
Lisa Cook
d)
Michael Barr
19.
Who nominates the governors? and which body confirms them?
a)
President; US Senate
b)
Chair; President
c)
State Legislature; US House of Representatives
d)
A special election is held; President
20.
Which Federal Reserve Bank president is the permanent voting member of the FOMC?
a)
New York
b)
Washington, DC
c)
Philadelphia
d)
Atlanta
21.
Which is the purpose or role of the Federal Reserve?
a)
implementor of fiscal policy
b)
supervisor of government spending
c)
lender of last resort
d)
minimal player in the payments system
22.
What event was responsible for the call for the creation of a central bank?
a)
The Great Depression
b)
The Panic of 1907
c)
World War I
d)
The Cold War
23.
What document for the Federal Reserve did President Woodrow Wilson sign in 1913?
a)
The Charter for the Federal Reserve
b)
The Monetary Control Act
c)
The Federal Reserve Act of 1913
d)
The Currency Reserve Law of 1913
24.
What is meant by the Fed's "dual mandate"?
a)
Keeping prices stable and promoting full employment
b)
Watching inflation and keeping money tight
c)
Helping the economy grow and regulating banks
d)
Monetary policy and fiscal policy
25.
What entity mandated the the Fed accomplish goals of promoting maximum employment and stable prices?
a)
US Congress
b)
Federal Reserve's Board of Governors
c)
Federal Open Market Committee
d)
Presidents of the regional Federal Reserve Banks
26.
Who makes monetary policy decisions?
a)
US Congress
b)
Federal Reserve's Board of Governors
c)
Federal Open Market Committee
d)
Presidents of the regional Federal Reserve Banks
27.
Historically there were three forms of money: salt, paper money, and livestock. Using two characteristics, explain why paper money was chosen for today's economy.
a)
Paper money was chosen for its weight and cultural value.
b)
Paper money was chosen for its durability and aesthetic appeal.
c)
Paper money was chosen for its portability, durability, acceptability, divisibility, and scarcity.
d)
Paper money was chosen for its scarcity and historical significance.
28.
Why is it important for the Federal Reserve to clearly explain the monetary policy decisions to the public?
a)
It is unnecessary for the Federal Reserve to explain monetary policy decisions as the public does not need to understand them.
b)
To clearly explain monetary policy decisions so the public can make informed decisions about spending and budgeting.
c)
To ensure the public has access to their banking needs and loan approvals.
d)
It is crucial for the Federal Reserve to keep monetary policy decisions secret to avoid public panic.
29.
Describe the role of money as a store of value.
a)
Money is primarily used for bartering goods.
b)
Money serves only as a medium of exchange.
c)
Money acts as a store of value by preserving purchasing power over time.
d)
Money loses value over time due to inflation.
30.
Which of the following is NOT a function of the Federal Reserve?
a)
Regulating monetary policy
b)
Issuing currency
c)
Setting tax rates
d)
Supervising banks
31.
What is one reason why the Federal Reserve aims to maintain price stability?
a)
To encourage excessive borrowing
b)
To help consumers and businesses plan for the future
c)
To increase government spending
d)
To reduce the number of banks
32.
Which characteristic makes money easy to use in everyday transactions?
a)
Durability
b)
Scarcity
c)
Portability
d)
Stability
33.
What is the primary goal of the Federal Reserve when adjusting interest rates?
a)
To set prices for consumer goods
b)
To reduce the number of banks
c)
To control inflation and support economic growth
d)
To increase government revenue
34.
What is the term length for a member of the Federal Reserve's Board of Governors?
a)
4 years
b)
14 years
c)
10 years
d)
7 years
35.
Which of the following best describes the role of the Federal Open Market Committee (FOMC)?
a)
It supervises commercial banks directly.
b)
It makes decisions regarding the nation's monetary policy.
c)
It sets fiscal policy for the federal government.
d)
It issues currency to the public.
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