This quiz works best with JavaScript enabled. Home > Economics > Monetary > Federal Reserve > Federal Reserve – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Federal Reserve Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is NOT a function of the Federal Reserve? A) Provide financial services to member banks. B) Regulate and ensure a stable banking system. C) Conduct monetary policy. D) Taxation and revenue collection. Show Answer Correct Answer: D) Taxation and revenue collection. 2. The central bank of the United States is the: A) Comptroller's Bank. B) United States National Bank. C) Federal Reserve Banking System. D) U.S. Treasury Bank. Show Answer Correct Answer: C) Federal Reserve Banking System. 3. The Monetary Control Act of 1980 required the Fed to ..... A) Become a government entity. B) Charge for its financial services. C) Transition its payment processing services to local banks. D) Product U.S. currency and coin. Show Answer Correct Answer: B) Charge for its financial services. 4. The Truth in Lending Act requires banks to ..... A) Monitor account activity. B) Charge for services. C) Disclose financial charges in advance. D) Limit fees for specialized accounts. Show Answer Correct Answer: C) Disclose financial charges in advance. 5. Federal Reserve head offices each have a ..... member board of directors. A) 20. B) 14. C) 9. D) 4. Show Answer Correct Answer: C) 9. 6. Elementary schools, police departments, and electrical service are typically paid for by A) State governments. B) Local governments. C) Natural monopolies. D) The federal government. Show Answer Correct Answer: B) Local governments. 7. Why do people accept money as payment for goods and services? A) People trust the U.S. government. B) Paper money is pretty. C) Paper money is valuable. D) Paper money can be exchanged for gold. Show Answer Correct Answer: A) People trust the U.S. government. 8. If a central bank significantly increases its sales of government bonds, it is most likely responding to which of the following? A) An appreciating domestic currency. B) Rising unemployment. C) Slow economic growth. D) High inflation rates or Hyperinflation. Show Answer Correct Answer: D) High inflation rates or Hyperinflation. 9. The parts of the federal government that regulate businesses and the free market, all mostly include what in their name? A) Administration. B) Cabinet. C) Executive Department. D) Commission or board. Show Answer Correct Answer: D) Commission or board. 10. The Required Reserve Ratio, Federal Funds Rate, and Discount Rate are all tools of ..... A) Capitalism. B) Congress. C) The Executive Branch. D) The Federal Reserve. Show Answer Correct Answer: D) The Federal Reserve. 11. The 2004 Check Clearing for the 21st Century Act, was also known as Check 21, permits banks to A) Limit check transactions for customers. B) Replace original checks with "substitute checks" or electronic replicas. C) Process checks over $ 10, 000. D) Transport checks without security. Show Answer Correct Answer: B) Replace original checks with "substitute checks" or electronic replicas. 12. How many reserve banks are there? A) 10. B) 11. C) 13. D) 12. Show Answer Correct Answer: D) 12. 13. Who supervises banks to make sure that they are not doing anything illegal? A) Federal Open Market Committee. B) Department of Treasury. C) President. D) Federal Reserve. Show Answer Correct Answer: D) Federal Reserve. 14. Leyla bought a bagel with coins issued by the government. This type of money is A) Counterfeit. B) Commodity. C) Representative. D) Fiat. Show Answer Correct Answer: D) Fiat. 15. Jill bought a laptop with a silver receipt (paper that can be traded for silver). This type of money is A) Representative money. B) Fiat money. C) Currency. D) Commodity money. Show Answer Correct Answer: A) Representative money. 16. The federal government might use fiscal policy to slow down an economic expansion by ..... federal spending & ..... federal taxes. A) Increasing / Decreasing. B) Starting / Stopping. C) More / More. D) Decreasing / Increasing. Show Answer Correct Answer: D) Decreasing / Increasing. 17. Which of the following is the single largest federal expenditure? A) National defense. B) Medicare. C) Interest. D) Social Security. Show Answer Correct Answer: D) Social Security. 18. What is clearinghouse? A) Help to clear old money. B) Watches over state banks. C) Help clear the billions of checks being processed. D) Supervise online banking. Show Answer Correct Answer: C) Help clear the billions of checks being processed. 19. When was the Federal Reserve Act signed into law? A) December 23, 1913. B) November 7, 1912. C) December 7, 1912. D) December 7, 1913. Show Answer Correct Answer: A) December 23, 1913. 20. What is the annual percentage rate (APR) A) Annual rate (including fees) paid for borrowed money. B) Interest on a mortgage. C) A bank fee. D) All of the above. Show Answer Correct Answer: A) Annual rate (including fees) paid for borrowed money. 21. Earnings on stocks are called A) Over the counter stocks. B) Growth stocks. C) Blue chip stocks. D) Dividends. Show Answer Correct Answer: D) Dividends. 22. Which of the following will likely slow economic growth? A) Decreasing required reserves. B) Decreasing discount rate. C) Buying bonds. D) Increasing fed fund rate. Show Answer Correct Answer: D) Increasing fed fund rate. 23. The financial crisis beginning in the late 2000's was initially linked to which economic sector? A) Manufacturing. B) Real Estate/Housing. C) Consumer Spending. D) Banking/Finance. Show Answer Correct Answer: B) Real Estate/Housing. 24. Which of the following is NOT a type of currency? A) Coins. B) Credit cards. C) Federal Reserve notes. D) Checks and debit cards. Show Answer Correct Answer: B) Credit cards. 25. What is the Federal Reserve's primary source of income? A) Interest on government securities. B) Fees fro check processing. C) Tax revenues. D) Treasury department. Show Answer Correct Answer: A) Interest on government securities. 26. What do state governments spend he most on? A) Higher education. B) Local governments. C) Welfare. D) The federal government. Show Answer Correct Answer: B) Local governments. 27. Each Federal Reserve district president reports to the A) Governor. B) Board of directors. C) Finance committee. D) Senate. Show Answer Correct Answer: B) Board of directors. 28. Which Federal Reserve district serve the largest number of states> A) Cleveland. B) Atlanta. C) Dallas. D) San Francisco. Show Answer Correct Answer: D) San Francisco. 29. Who sells government bonds? A) EROC. B) Federal Reserve. C) Banks. D) None of above. Show Answer Correct Answer: B) Federal Reserve. 30. "Those who benefit from government goods and services should pay in proportion to the amount of the benefits they receive." So states the A) Ability-to-pay rule. B) Benefit principle. C) Alternative minimum tax. D) Incidence of tax. Show Answer Correct Answer: B) Benefit principle. Next →Related QuizzesMonetary QuizzesEconomics QuizzesFederal Reserve Quiz 2Federal Reserve Quiz 3Federal Reserve Quiz 4Federal Reserve Quiz 5Federal Reserve Quiz 6Federal Reserve Quiz 7Federal Reserve Quiz 8Federal Reserve Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books