This quiz works best with JavaScript enabled. Home > Economics > Monetary > Federal Reserve > Federal Reserve – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Federal Reserve Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The Feds chief body of monetary policy making is the ..... A) Economists. B) Purchasing desk of the New York Federal Reserve. C) Federal Open Market Committee. D) Reserve bank presidents. Show Answer Correct Answer: C) Federal Open Market Committee. 2. An example of a tight money policy is A) An increase in the reserve requirement. B) The Fed buying government securities in the open market. C) A decrease in the prime lending rate. D) A decrease in the discount rate. Show Answer Correct Answer: A) An increase in the reserve requirement. 3. The ..... District Federal Reserve Bank serves Michigan A) Memphis. B) Columbia. C) Chicago. D) Richmond. Show Answer Correct Answer: C) Chicago. 4. The American Revolutionary that believed a centralized banking system was a key to promoting industry and trade A) Andrew Jackson. B) Benjamin Franklin. C) Alexander Hamilton. D) George Washington. Show Answer Correct Answer: C) Alexander Hamilton. 5. What is a stock? A) An option to purchase something in the future at todays price. B) A share of ownership in a company. C) A loan an investor makes to a company or government that pays interest over time. D) A collection of investments sold as a package. Show Answer Correct Answer: B) A share of ownership in a company. 6. The minimum amount of reserves that must be held by a commercial bank is called the ..... A) Discount rate. B) Reserve Requirements. C) District banks. D) Money supply. Show Answer Correct Answer: B) Reserve Requirements. 7. Which of the following is the most frequently used tool the Fed uses to control the supply of money? A) The 30-year home-mortgage interest rate. B) The discount rate. C) Open market operations. D) The reserve requirements. Show Answer Correct Answer: C) Open market operations. 8. Which of these is NOT a job of the Federal Reserve? A) Give out loans to customers. B) Maintain the value of currency. C) Monitor banks. D) Act as the bank for the U.S. government. Show Answer Correct Answer: A) Give out loans to customers. 9. Most commonly used tool by the Federal Reserve which is the buying and selling of government securities (bonds) A) Interest on reserves. B) Discount rate. C) Reserve requirement. D) Open market operations. Show Answer Correct Answer: D) Open market operations. 10. How many Regional Banks are in the Federal Reserve System? A) 4. B) 7. C) 5. D) 12. Show Answer Correct Answer: D) 12. 11. Which financial institution is insured by NCUA? A) Commercial banks. B) Credit unions. C) Savings and loans. D) None of above. Show Answer Correct Answer: B) Credit unions. 12. When the FOMC wants government securities to be bought or sold, what is contacted? A) 12 District Reserve Banks. B) Trading Desk in New York. C) Washington Federal Market Center. D) The FOMC handles selling and purchasing of government securities from its office in Washington. Show Answer Correct Answer: B) Trading Desk in New York. 13. Who is in charge of printing currency and the design of currency bills? A) Fed Chair. B) Federal Reserve Board of Governors. C) US Treasury Department. D) State governments. Show Answer Correct Answer: C) US Treasury Department. 14. FOMC, the policy making body of the Federal Reserve, stands for A) Financial Options Management Corporation. B) Final Organized Money Company. C) Fiscal Operating Money Committee. D) Federal Open Market Operations. Show Answer Correct Answer: D) Federal Open Market Operations. 15. If a $ 20 bill is still worth $ 20 in 10 years, which function of money is being used? A) Unit of Account. B) Medium of Exchange. C) Acceptable. D) Store of Value. Show Answer Correct Answer: D) Store of Value. 16. Through open market operations, the Federal Reserve buys and sells government securities to influence the supply of bank reserves. When the Fed wants to increase reserves, it does what? A) Sells Securities. B) Buys Securities. C) Nothing. D) None of above. Show Answer Correct Answer: B) Buys Securities. 17. How many political entities or groups exercise oversight over the Bureaucracy, including the Federal Reserve? A) 0:No one. B) 1:Only the President. C) 2:The President and Senate, but not the House. D) 3:The President, Senate and House of Representatives. Show Answer Correct Answer: D) 3:The President, Senate and House of Representatives. 18. Which of the following is NOT considered money in the United States? A) Coins. B) Federal reserve notes. C) Stocks and bonds. D) Currency. Show Answer Correct Answer: C) Stocks and bonds. 19. What is the responsibility of the FOMC? A) It is responsible for formulation of a policy designed to promote stable prices and economic growth. B) Decides tax rates. C) Change money supply to fight recessions. D) None of above. Show Answer Correct Answer: A) It is responsible for formulation of a policy designed to promote stable prices and economic growth. 20. The main objective of the supervisory process is to evaluate the overall ..... and ..... of a banking organization. A) Safety and soundness. B) Security and liability. C) Investments and risk. D) Diversity and loans. Show Answer Correct Answer: A) Safety and soundness. 21. Which of the following would be a key element in Supply Side economics? A) Raising taxes on businesses. B) Lowering taxes on businesses. C) Increasing spending on roads and bridges. D) Increasing regulation of small business. Show Answer Correct Answer: B) Lowering taxes on businesses. 22. What is the Federal Reserve's Systems main goal? A) To keep people safe. B) To make money. C) To make sure money is available. D) None of above. Show Answer Correct Answer: C) To make sure money is available. 23. The Federal Reserve Board of Governors has: A) Seven members who serve 14-year terms. B) Seven members who serve 4-year terms. C) 12 members who serve 4-year terms. D) 12 members who serve 14-year terms. Show Answer Correct Answer: A) Seven members who serve 14-year terms. 24. Fiscal policy may involve ..... A) Recognizing an economic problem. B) Taxing corporations. C) Regulating labor unions. D) Estimating the GDP. Show Answer Correct Answer: B) Taxing corporations. 25. How many members does the board of governors have A) 1. B) 3. C) 7. D) 10. Show Answer Correct Answer: C) 7. 26. You receive money as payment for working at a grocery store. This best illustrates which function of money? A) Unit of account. B) Store of value. C) Commodity money. D) Medium of exchange. Show Answer Correct Answer: D) Medium of exchange. 27. The 2008 Financial Crisis was caused by: A) Too much regulation in the US financial sector. B) Not enough money flowing around in the economy. C) Thousands of "sub-prime" loans made by banks looking for quick profit. D) A decrease in taxing by the federal government. Show Answer Correct Answer: C) Thousands of "sub-prime" loans made by banks looking for quick profit. 28. Who oversees the actions of the Fed? A) President. B) Supreme Court. C) No one. D) Congress. Show Answer Correct Answer: D) Congress. 29. What is the full name of "The Fed" ? A) The Federal Government. B) The Federal Reserve. C) The Federal Fed Fed Federal. D) The Federal Bureau of Investigation. Show Answer Correct Answer: B) The Federal Reserve. 30. How is the Chair of the Federal Reserve selected? A) Voted on by American public. B) Appointed by POTUS and approved by the Senate. C) Appointed by the president of the World Bank. D) Chosen by the Senate Majority Leader. Show Answer Correct Answer: B) Appointed by POTUS and approved by the Senate. ← PreviousNext →Related QuizzesMonetary QuizzesEconomics QuizzesFederal Reserve Quiz 1Federal 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