This quiz works best with JavaScript enabled. Home > Economics > Monetary > Federal Reserve > Federal Reserve – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Federal Reserve Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which was NOT a key cause of the 2008 recession? A) Buying on margin. B) Housing bubble. C) Deregulation of banking services. D) Dot com bubble burst. Show Answer Correct Answer: A) Buying on margin. 2. What part of the US Constitution discusses the President's appointment powers? A) The Constitution doesn't mention this. B) Article III. C) Article I. D) Article II. Show Answer Correct Answer: D) Article II. 3. The Federal Deposit Insurance Corporation: A) Insures all demand deposits without limit. B) Insures all demand deposits up to $ 250, 000. C) Insures all demand deposits up to $ 25, 000. D) Has eliminated bank failures. Show Answer Correct Answer: B) Insures all demand deposits up to $ 250, 000. 4. When was the Federal Reserve System discovered? A) 1918. B) 1916. C) 1924. D) 1913. Show Answer Correct Answer: D) 1913. 5. The agency responsible for regulating the money supply in the United States is A) The Secretary of the Treasury. B) The President of the United States. C) The Federal Reserve. D) The U.S. Treasury. Show Answer Correct Answer: C) The Federal Reserve. 6. If you car is said to be worth $ 20, 000, what function of money is being used? A) Unit of Account. B) Store of Value. C) Medium of Exchange. D) Acceptable. Show Answer Correct Answer: A) Unit of Account. 7. The Federal Reserve has a dual mandate to ..... A) Increase stock market volatility. B) Reduce unemployment. C) Seek price stability. D) Keep unemployment low and prices stable. Show Answer Correct Answer: D) Keep unemployment low and prices stable. 8. To fight inflation, the FED should ..... A) Lower interest rates. B) Increase reserve requirements. C) Decrease reserve requirements. D) Keep interest rates the same. Show Answer Correct Answer: B) Increase reserve requirements. 9. What is NOT one of the three main functions of money? A) Unit of Account. B) Medium of Exchange. C) Durability. D) Store of Value. Show Answer Correct Answer: C) Durability. 10. The least circulated US coin is the A) Penny. B) Half dollar. C) Quarter. D) Presidential dollar. Show Answer Correct Answer: B) Half dollar. 11. If the Fed wanted increase economic activity (ease monetary policy), which might they do? A) Decrease the interest rate. B) Increase reserves, limiting what banks can loan. C) Lower taxes. D) Increase the interest rate. Show Answer Correct Answer: A) Decrease the interest rate. 12. How many times to Open Market Committee meet per year? A) 4. B) 2. C) 8. D) 1. Show Answer Correct Answer: C) 8. 13. Unemployment is low and prices are rising steadily A) Tight Money. B) Easy Money. C) Do Nothing. D) None of above. Show Answer Correct Answer: A) Tight Money. 14. Which of the following is a function of the FR system A) To elect the president. B) To clean dirty money. C) Supervise and regulate banking operations. D) Supervise school money. Show Answer Correct Answer: C) Supervise and regulate banking operations. 15. Which function of the Federal Reserve is most likely to influence whether or not you borrow money in the future? A) Maximum employment. B) Payments services. C) Monetary policy. D) Supervision/regulation of banks. Show Answer Correct Answer: C) Monetary policy. 16. Interest rate the Federal Reserve charges member banks for loans A) Revenue collection. B) Discount rate. C) Open market operations. D) Reserve requirement. Show Answer Correct Answer: B) Discount rate. 17. Which of these was NOT a result of the historically high inflation of the 1970s? A) Increase in producer and consumer prices. B) Increased unemployment. C) High oil prices. D) Doubling of the federal deficit. Show Answer Correct Answer: B) Increased unemployment. 18. Money lent by a bank effectively becomes more money through repeated spending thanks to the ..... A) Entitlements. B) Deposit multiplier. C) Interest rates. D) None of above. Show Answer Correct Answer: B) Deposit multiplier. 19. Which of these is a Federal Reserve note? A) A credit card. B) A dime. C) A 20 dollar bill. D) A check. Show Answer Correct Answer: C) A 20 dollar bill. 20. What are reserve banks? A) Banks that help the central bank carry out its duties. B) Banks that loan money to anyone who applies. C) Banks that are located in each state. D) Banks that set the interest rate. Show Answer Correct Answer: A) Banks that help the central bank carry out its duties. 21. What is the number of electoral votes for each state based on? A) How long that state has been part of the United States. B) Population. C) Congressional Representation. D) Number of registered voters in the state. Show Answer Correct Answer: C) Congressional Representation. 22. Who makes decisions regarding changes in the discount rate? A) The Federal Reserve. B) Bank presidents. C) Board of governors. D) Board of supervisors. Show Answer Correct Answer: C) Board of governors. 23. During the 1920's, the Fed began to use this as a monetary policy tool following the actions by Benjamin Strong. A) Credit swaps with other central banks. B) Open market operations. C) Gold and Silver monitoring. D) International exchange agreements. Show Answer Correct Answer: B) Open market operations. 24. What is the primary reason for a company to issue stock? A) To raise money to grow the company. B) To distribute the risk of bankruptcy across more investors. C) The stocks help investors earn a higher rate of return. D) To increase greater awareness of the company. Show Answer Correct Answer: A) To raise money to grow the company. 25. We are in a recession. Factory orders are down, and the economy appears to be slumping. A) Tight Money. B) Easy Money. C) Do Nothing. D) None of above. Show Answer Correct Answer: B) Easy Money. 26. Which financial institution is considered full service because they offer a variety of services? A) Commercial banks. B) Credit unions. C) Savings and loans. D) None of above. Show Answer Correct Answer: A) Commercial banks. 27. Who decides whether or not to change interest rates? A) Chairman of the Board of Governors. B) Board of Governors. C) Federal Reserve District Banks. D) Federal Open Market Committee. Show Answer Correct Answer: D) Federal Open Market Committee. 28. BONUS:The current chairperson of the Federal Reserve is: A) Jerome Powell. B) Janet Yellen. C) Alan Greenspan. D) Ben Bernanke. Show Answer Correct Answer: A) Jerome Powell. 29. What is the electronic payment delivery system most often used to process low-dollar recurring retail payments? A) ACH. B) Fedwire. C) Debit Track. D) ATM. Show Answer Correct Answer: A) ACH. 30. Controlling of the money supply by the Federal Reserve to influence the cost and availability of credit A) Monetary policy. B) Fiscal policy. C) Supply side economics. D) GDP ouput expenditure model. Show Answer Correct Answer: A) Monetary policy. ← PreviousNext →Related QuizzesMonetary QuizzesEconomics QuizzesFederal Reserve Quiz 1Federal Reserve Quiz 2Federal 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