This quiz works best with JavaScript enabled. Home > Economics > Monetary > Federal Reserve > Federal Reserve – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Federal Reserve Quiz 10 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The Fed makes the banks keep a certain amount of money on hand. This is referred to as the ..... A) Reserve requirement. B) Hoard. C) Emergency Fund. D) Stockpile. Show Answer Correct Answer: A) Reserve requirement. 2. If the federal reserve increases interest rates and reserve requirements, what would be the most likely effect of that decision? A) The stock market will crash. B) Unemployment will rise. C) Unemployment will fall. D) Inflation will rise. Show Answer Correct Answer: B) Unemployment will rise. 3. The government may use contractionary economic policies if the economy is growing ..... A) Too fast. B) Too slow. C) Unpredictably. D) Unequally. Show Answer Correct Answer: A) Too fast. 4. To finance the American Revolution, the first paper notes were produced were known as? A) U.S. Notes. B) Greenbacks. C) Continentals. D) Bank Notes. Show Answer Correct Answer: C) Continentals. 5. If the supply of money in the economy increases, the Fed must have ..... the discount rate or the reserve requirement. A) Monitored. B) Kept the same. C) Decreased. D) Increased. Show Answer Correct Answer: C) Decreased. 6. Marcella puts money into her savings account. Which function of money does this illustrate? A) Unit of account. B) Store of value. C) Medium of exchange. D) Fiat money. Show Answer Correct Answer: B) Store of value. 7. The Consumer Financial Protection Bureau also provides consumers with information about A) Credit reports. B) Identity theft. C) Home loans. D) All of these. Show Answer Correct Answer: D) All of these. 8. Which is a goal of the Federal Reserve's monetary policy? A) Develop fiscal policy for the United States. B) Create price stability in the economy. C) Create a high level of inflation. D) Print currency for American citizens. Show Answer Correct Answer: B) Create price stability in the economy. 9. The ..... acts as the federal government's bank A) National Bank of the United States. B) First Bank of the United States. C) Federal Reserve Bank. D) Bank of America. Show Answer Correct Answer: C) Federal Reserve Bank. 10. Money deposited in a ..... can be withdrawn at any time by check or debit card. A) Money market account. B) Savings account. C) Checking account. D) Certificate of deposit. Show Answer Correct Answer: C) Checking account. 11. Which of the following scenarios would increase the money supply? A) The Federal Reserve buys bonds on the open market. B) Increasing the reserve requirement. C) The Federal Reserve sells bonds on the open market. D) Increasing the discount rate. Show Answer Correct Answer: A) The Federal Reserve buys bonds on the open market. 12. The Federal Reserve act was signed into law by then president Woodrow Wilson in ..... A) 1930. B) 1913. C) 1917. D) 1865. Show Answer Correct Answer: B) 1913. 13. What is the definition of barter? A) Money serves as a medium of exchange. B) Paper money is backed by gold. C) Only precious metals are accepted as money goods are traded directly for other goods. D) Goods are traded directly for other goods. Show Answer Correct Answer: D) Goods are traded directly for other goods. 14. In Keynes's view, a short-term budget deficit due to government spending or tax cuts is ..... A) To be avoided at all costs. B) Sometimes necessary to help stimulate the economy. C) Economically impossible. D) Morally wrong. Show Answer Correct Answer: B) Sometimes necessary to help stimulate the economy. 15. Money accepted for goods and services defines which function of money? A) Medium of exchange. B) Store of value. C) Measure of value/unit of account. D) None of the above. Show Answer Correct Answer: A) Medium of exchange. 16. Written rule defining acceptable behavior A) Regulation. B) Supervision. C) Examiners. D) Governors. Show Answer Correct Answer: A) Regulation. 17. Which of these actions would be an example of monetary policy? A) Increasing exports. B) Reducing income taxes. C) Lowering government spending. D) Raising the reserve requirement. Show Answer Correct Answer: D) Raising the reserve requirement. 18. The Federal Deposit Insurance Corporation (FDIC) was created to A) Insure customers money against inflation. B) Insure customer deposits if a bank fails. C) Insure banks if a customer dosent make enough deposits. D) Allow customers to make deposits at federal banks. Show Answer Correct Answer: B) Insure customer deposits if a bank fails. 19. ..... carry out Fed policy and oversee banking within its district. A) Financial Institutions. B) Federal Reserve System. C) District banks. D) None of above. Show Answer Correct Answer: C) District banks. 20. Which is the long term goal of the FED A) Low stable inflation. B) High stable inflation. C) Low stable recession. D) High stable inflation. Show Answer Correct Answer: A) Low stable inflation. 21. Which part of the Fed is considered private? A) The President. B) The 12 Reserve Banks. C) The FOMC. D) Board of Governors. Show Answer Correct Answer: B) The 12 Reserve Banks. 22. Interest rate the Fed charges on loans to member banks A) Interest Rate. B) Federal Rate. C) Prime Rate. D) Discount Rate. Show Answer Correct Answer: D) Discount Rate. 23. The primary metal used to make nickels is A) Steel. B) Copper. C) Zinc. D) Nickel. Show Answer Correct Answer: B) Copper. 24. A liquid asset is one where the asset is easily A) Converted to the medium of exchange. B) Circulated throughout the economy in a given year. C) Exchanged because of the intrinsic value of commodity money. D) Transported to the bank. Show Answer Correct Answer: A) Converted to the medium of exchange. 25. If the economy is expanding too quickly, the Federal Reserve will try to stabilize the economy by doing what? A) Lowering the discount rate. B) Decreasing interest rates. C) Decreasing money supply. D) Increasing money supply. Show Answer Correct Answer: C) Decreasing money supply. 26. Which of the following is expansionary policy?Play out each scenario-don't guess A) Selling bonds. B) Decrease discount rate. C) Increase required reserves. D) None of above. Show Answer Correct Answer: B) Decrease discount rate. 27. Coins and paper bills make up the ..... of the United States. A) Barter. B) Currency. C) Debt. D) None of above. Show Answer Correct Answer: B) Currency. 28. The Federal Reserve regulates and monitors ..... A) Government agencies. B) Businesses. C) Consumers. D) Banks. Show Answer Correct Answer: D) Banks. 29. The terms proportional, progressive, and regressive refer to A) Types of taxes. B) Goals of tax reform. C) Principles of taxation. D) Criteria for effective taxes. Show Answer Correct Answer: A) Types of taxes. 30. Which type of tax is levied on specific items or services, including gasoline and telephone services? A) Gift tax. B) Customs duty. C) Excise tax. D) Estate tax. Show Answer Correct Answer: C) Excise tax. ← PreviousNext →Related QuizzesMonetary QuizzesEconomics QuizzesFederal Reserve Quiz 1Federal Reserve Quiz 2Federal Reserve Quiz 3Federal Reserve Quiz 4Federal Reserve Quiz 5Federal Reserve Quiz 6Federal Reserve Quiz 7Federal Reserve Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books