This quiz works best with JavaScript enabled. Home > Economics > Monetary > Federal Reserve > Federal Reserve – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Federal Reserve Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How often does the Federal Open Market Committee meet? A) Six times per year. B) One time per month. C) Eight times per year. D) Four times per year. Show Answer Correct Answer: C) Eight times per year. 2. Which action by the Federal Reserve would help to slow down rising inflation? A) Raise Taxes. B) Sell Bonds. C) Buy Bonds. D) Lower Interest Rates. Show Answer Correct Answer: B) Sell Bonds. 3. The goals of monetary policy do not include the promotion of A) Stable prices. B) Low taxes. C) Moderate long-term interest rates. D) Maximum employment. Show Answer Correct Answer: B) Low taxes. 4. The Federal Reserve has a total of ..... districts. A) 12. B) 11. C) 10. D) 13. Show Answer Correct Answer: A) 12. 5. In a budget ....., revenues are higher than expenses. A) Balanced. B) Deficit. C) Surplus. D) None of above. Show Answer Correct Answer: C) Surplus. 6. What is discount rate? A) The macroeconomic policy laid down by the central bank. B) Interest rate charged to commercial banks and other depository institutions on loans they receive. C) Implies avoiding both prolonged inflation and deflation. D) None of above. Show Answer Correct Answer: B) Interest rate charged to commercial banks and other depository institutions on loans they receive. 7. An individual bank can lend out at most its: A) Checkable deposits. B) Actual reserves. C) Legal reserves. D) Excess reserves. Show Answer Correct Answer: D) Excess reserves. 8. WHat is the main purpose of a sin tax? A) Revenue generation. B) Behavior adjustment. C) Income redistribution. D) Resource allocation. Show Answer Correct Answer: B) Behavior adjustment. 9. Alan paid 6 oranges for 2 dozen eggs. This type of money is A) Currency. B) Commodity. C) Fiat. D) Representative. Show Answer Correct Answer: B) Commodity. 10. In a ..... budget, revenues and expenses are equal. A) Balanced. B) Deficit. C) Surplus. D) None of above. Show Answer Correct Answer: A) Balanced. 11. Which US president below is most associated with Supply Side Economics? A) Harry Truman ( D ). B) Ronald Reagan ( R ). C) Dwight Eisenhower ( R ). D) Lyndon Johnson ( D ). Show Answer Correct Answer: B) Ronald Reagan ( R ). 12. The FED's have their own special trained ..... ? A) Bankers. B) Police course. C) Staff. D) None of above. Show Answer Correct Answer: B) Police course. 13. The amount of deposits that banks are required to keep on hand is called ..... ? A) Reserve requirements. B) Monetary policy. C) Prime rate. D) Money creation. Show Answer Correct Answer: A) Reserve requirements. 14. The Fed controls GDP A) Indirectly through tax collections. B) Indirectly through the money supply. C) Directly through price indexing. D) Directly through government spending. Show Answer Correct Answer: B) Indirectly through the money supply. 15. The percentage of checkable deposits that banks and other financial intermediaries are required to keep in cash reserves by the Federal Reserve is known as: A) The required reserve ratio. B) The discount rate. C) The fractional reserve requirement. D) The excess reserve requirement. Show Answer Correct Answer: A) The required reserve ratio. 16. The Federal Reserve System controls the size of the A) Tax supply. B) Money supply. C) Demand supply. D) Production supply. Show Answer Correct Answer: B) Money supply. 17. The profit (revenues in excess of costs) of the Federal Reserve is given to the A) US president. B) Treasury. C) State government. D) IRS. Show Answer Correct Answer: B) Treasury. 18. The total amount borrowed from investors to finance the government's deficit spending A) National debt. B) Intergovernmental revenue. C) Excise tax. D) Flat tax. Show Answer Correct Answer: A) National debt. 19. The index of leading economic indicators shows a strong move towards inflation. A) Tight Money. B) Easy Money. C) Do Nothing. D) None of above. Show Answer Correct Answer: A) Tight Money. 20. A short-term monetary policy action would MOST LIKELY A) Raise unemployment insurance. B) Raise medicare coverage. C) Lower interest rates. D) Lower federal taxes. Show Answer Correct Answer: C) Lower interest rates. 21. Which of these is not a security feature of US currency? A) Color-shifting ink. B) Magnetic strip. C) Image of the pyramid. D) Red and blue fibers. Show Answer Correct Answer: C) Image of the pyramid. 22. Unit of Account: A) Money is a measurement of value. B) Money is accepted in exchange for goods/services. C) Money can maintain value over time. D) None of above. Show Answer Correct Answer: A) Money is a measurement of value. 23. The FED acts as the bank for ..... A) The federal government. B) Local governments. C) Businesses and individuals. D) Beyonce. Show Answer Correct Answer: A) The federal government. 24. The Fed helps consumers by keeping interest rates and inflation ..... A) High. B) Volatile. C) Low. D) Scary. Show Answer Correct Answer: C) Low. 25. The principal plus accrued interest-to-date (not just principal) is calculated for each time period as more interest accrues A) Compound Interest. B) Simple Interest. C) Credit Card. D) Loan Interest. Show Answer Correct Answer: A) Compound Interest. 26. ..... pay interest on deposits and allow people to make withdrawals. A) Money market account. B) Checking account. C) Savings accounts. D) Certificate of deposit. Show Answer Correct Answer: C) Savings accounts. 27. Which US President is most associated with Keynesian economics? A) Franklin Roosevelt ( D ). B) James Garfield ( R ). C) Jimmy Carter ( D ). D) George H.W. Bush ( R ). Show Answer Correct Answer: A) Franklin Roosevelt ( D ). 28. What is the percentage of deposits that the Fed requires banks to hold back and not lend out A) Reserve Requirement Rate. B) Discount Rate. C) Fed Fund Rate. D) I.O.U Rate. Show Answer Correct Answer: A) Reserve Requirement Rate. 29. All of the following are examples of financial institutions EXCEPT A) Savings and loans. B) Credit unions. C) Commercial banks. D) Retailers. Show Answer Correct Answer: D) Retailers. 30. Why do we pay taxes in our country? A) To make our Government rich. B) To provide for Public Goods and Services. C) To provide for Goods and Services. D) None of above. Show Answer Correct Answer: B) To provide for Public Goods and Services. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books