This quiz works best with JavaScript enabled. Home > Economics > Monetary > Federal Reserve > Federal Reserve – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Federal Reserve Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is not a main responsibility of the 12 District Reserve Banks? A) Contribute to monetary policy. B) Provide financial services. C) Supervise commercial banks. D) Deposit payroll checks. Show Answer Correct Answer: D) Deposit payroll checks. 2. The National Banking Act of 1863 provided for currency circulated by nationally chartered banks to be backed by U.S. government securities, this effectively helped to create ..... A) Low inflation. B) Price stability. C) The gold standard. D) Uniform currency for the nation. Show Answer Correct Answer: D) Uniform currency for the nation. 3. Funds that one level of government receives from another level of government A) Flat tax. B) Excise tax. C) Intergovernmental revenue. D) National debt. Show Answer Correct Answer: C) Intergovernmental revenue. 4. How will it affect the economy if the Federal Reserve increases the Overnight rate? A) Nothing will happen. B) Banks will get mad. C) It will slow down the economy. D) It will speed up the economy. Show Answer Correct Answer: C) It will slow down the economy. 5. Where do Banks get the money they use to loan out to others? A) The Government. B) The Federal Reserve. C) Other Banks. D) The Savings of Depositers. Show Answer Correct Answer: D) The Savings of Depositers. 6. Which of the following is one of the main parts of the Federal Reserve System? A) Federal Open Market Committee. B) Stock market. C) Board of Operators. D) New York Stock Exchange. Show Answer Correct Answer: A) Federal Open Market Committee. 7. The Board of Governors is appointed by the A) President. B) Electorate. C) Vice president. D) Fed. Show Answer Correct Answer: A) President. 8. What is the term for the rise in prices over time? A) Inflation. B) Deflation. C) Interest. D) Depresstion. Show Answer Correct Answer: A) Inflation. 9. There are 12 of them, they serve a geographic district of the country, they take in deposits and make loans (to other banks). All these phrases describe A) The Federal Open Market Committee. B) The Department of the Treasury. C) Member Banks. D) None of above. Show Answer Correct Answer: C) Member Banks. 10. Someone challenging an incumbent president might want the Federal Reserve to do which of the following in an election year? A) Decrease interest rates. B) Increase interest rates. C) Recommend to Congress that fiscal stimulus be increased. D) Engage in quantitative easing. Show Answer Correct Answer: B) Increase interest rates. 11. Which financial institution offer loans such as mortgages and auto loans? A) Commercial banks. B) Credit unions. C) Savings and loans. D) All of them. Show Answer Correct Answer: D) All of them. 12. Which of these is NOT an advisory council to the the Federal Reserve Board of Governors? A) Federal advisory council. B) Thrift institutions advisor council. C) State advisory council. D) Consumer advisory council. Show Answer Correct Answer: C) State advisory council. 13. Which is a contractionary policy? A) Raising reserve requirements. B) Lowering discount rates. C) Feds buying bonds. D) None of above. Show Answer Correct Answer: A) Raising reserve requirements. 14. The ..... ..... ..... controls the supply of money by buying & selling government securities & bonds to expand or contract the money supply A) Department of State. B) Federal Open-Market Committee. C) Federal Bureau of Investigation. D) Central Intelligence Agency. Show Answer Correct Answer: B) Federal Open-Market Committee. 15. Money is used in the exchange of goods and services between sellers and ..... A) Businesses. B) The government. C) Banks. D) Consumers. Show Answer Correct Answer: D) Consumers. 16. What interest rate does a bank pay when it borrows reserves from the Fed? A) The prime rate. B) The federal funds rate. C) The required reserve rate. D) The discount rate. Show Answer Correct Answer: D) The discount rate. 17. Every financial institution is required to keep a certain percentage of deposits in reserve as cash in its vault or in an account at the Federal Reserve bank. This is called ..... A) Account percentage hold. B) Deposit hold. C) Reserve requirement. D) Security reserve. Show Answer Correct Answer: C) Reserve requirement. 18. The Federal Reserve has kept interest rates very low. Some might argue that this could lead to A) Deflation. B) A strong dollar. C) Inflation. D) Higher unemployment. Show Answer Correct Answer: C) Inflation. 19. This is considered an IOU and the higher the interest rate on this, the more risky it is A) T-bill. B) Stocks. C) Money market. D) Bond. Show Answer Correct Answer: D) Bond. 20. Which of the following is NOT a goal ofthe Federal Reserve? A) Slow down recessions. B) Stabilize the economy. C) Reduce inflation. D) Reduce property taxes. Show Answer Correct Answer: D) Reduce property taxes. 21. If the Federal Reserve encounters counterfeit currency during processing, those notes are forwarded to the A) Treasury. B) CIA. C) Secret Service. D) Local police dept. Show Answer Correct Answer: C) Secret Service. 22. What do the Federal Reserve do with old worn out money? A) Shred it. B) Replace it. C) Throw it away. D) None of above. Show Answer Correct Answer: A) Shred it. 23. Part of the Federal Reserve that sets monetary policy? A) Federal Open Market Committee. B) Federal Advisory Council. C) Bureau of Engraving and Printing. D) Bureau of Mint. Show Answer Correct Answer: A) Federal Open Market Committee. 24. The percentage of each deposit that the bank must hold in their vault, or on record with the Fed, is determined by the A) Federal funds rate. B) Required reserve ratio. C) Discount rate. D) Money multiplier. Show Answer Correct Answer: B) Required reserve ratio. 25. What percent of commercial banks in the US are members of the Federal Reserve System? A) 15%. B) 7%. C) 38%. D) 75%. Show Answer Correct Answer: C) 38%. 26. Members of the Federal Reserve Board of Governors serve one nonrenewable term of: A) Life. B) 4 years. C) 7 years. D) 14 years. Show Answer Correct Answer: D) 14 years. 27. Which economic theory below is most associated with stimulus spending and spending on public works to fight recessions? A) Supply side. B) Neoclassical. C) Deflationary. D) Keynesian. Show Answer Correct Answer: D) Keynesian. 28. Which of the following is a tax that is taken on the money you earn from the job you preform? A) Estate Tax. B) Social Security Tax. C) Sales tax. D) Income Tax. Show Answer Correct Answer: D) Income Tax. 29. Which president signed the Federal Reserve Act into law? A) Woodrow Wilson. B) Franklin D. Roosevelt. C) Harry Truman. D) Calvin Coolidge. Show Answer Correct Answer: A) Woodrow Wilson. 30. A tax on a business increases by $ 100. The business passes that tax on to the customer by increasing the price of products. What is the incidence of this tax? A) The customer. B) The state. C) The business. D) The government. Show Answer Correct Answer: A) The customer. ← PreviousNext →Related QuizzesMonetary QuizzesEconomics QuizzesFederal Reserve Quiz 1Federal Reserve Quiz 2Federal Reserve Quiz 3Federal Reserve Quiz 5Federal Reserve Quiz 6Federal Reserve Quiz 7Federal Reserve Quiz 8Federal Reserve Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books