This quiz works best with JavaScript enabled. Home > Monetary > Federal Reserve > Federal Reserve – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Federal Reserve Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. 2. Which of these is NOT an advisory council to the the Federal Reserve Board of Governors? A) Thrift institutions advisor council. B) State advisory council. C) Federal advisory council. D) Consumer advisory council. Show Answer Correct Answer: B) State advisory council. 3. 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. 4. The ..... ..... ..... controls the supply of money by buying & selling government securities & bonds to expand or contract the money supply A) Central Intelligence Agency. B) Federal Bureau of Investigation. C) Federal Open-Market Committee. D) Department of State. Show Answer Correct Answer: C) Federal Open-Market Committee. 5. Money is used in the exchange of goods and services between sellers and ..... A) The government. B) Consumers. C) Businesses. D) Banks. Show Answer Correct Answer: B) Consumers. 6. What interest rate does a bank pay when it borrows reserves from the Fed? A) The discount rate. B) The prime rate. C) The federal funds rate. D) The required reserve rate. Show Answer Correct Answer: A) The discount rate. 7. 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) Security reserve. C) Deposit hold. D) Reserve requirement. Show Answer Correct Answer: D) Reserve requirement. 8. The Federal Reserve has kept interest rates very low. Some might argue that this could lead to A) Inflation. B) Deflation. C) A strong dollar. D) Higher unemployment. Show Answer Correct Answer: A) Inflation. 9. This is considered an IOU and the higher the interest rate on this, the more risky it is A) Bond. B) T-bill. C) Money market. D) Stocks. Show Answer Correct Answer: A) Bond. 10. Which of the following is NOT a goal ofthe Federal Reserve? A) Slow down recessions. B) Reduce property taxes. C) Reduce inflation. D) Stabilize the economy. Show Answer Correct Answer: B) Reduce property taxes. 11. If the Federal Reserve encounters counterfeit currency during processing, those notes are forwarded to the A) CIA. B) Secret Service. C) Local police dept. D) Treasury. Show Answer Correct Answer: B) Secret Service. 12. 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. 13. 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. 14. The percentage of each deposit that the bank must hold in their vault, or on record with the Fed, is determined by the A) Discount rate. B) Required reserve ratio. C) Federal funds rate. D) Money multiplier. Show Answer Correct Answer: B) Required reserve ratio. 15. What percent of commercial banks in the US are members of the Federal Reserve System? A) 7%. B) 15%. C) 38%. D) 75%. Show Answer Correct Answer: C) 38%. 16. Members of the Federal Reserve Board of Governors serve one nonrenewable term of: A) 4 years. B) 7 years. C) 14 years. D) Life. Show Answer Correct Answer: C) 14 years. 17. Which economic theory below is most associated with stimulus spending and spending on public works to fight recessions? A) Supply side. B) Deflationary. C) Keynesian. D) Neoclassical. Show Answer Correct Answer: C) Keynesian. 18. Which of the following is a tax that is taken on the money you earn from the job you preform? A) Sales tax. B) Social Security Tax. C) Income Tax. D) Estate Tax. Show Answer Correct Answer: C) Income Tax. 19. Which president signed the Federal Reserve Act into law? A) Calvin Coolidge. B) Harry Truman. C) Woodrow Wilson. D) Franklin D. Roosevelt. Show Answer Correct Answer: C) Woodrow Wilson. 20. 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 state. B) The customer. C) The government. D) The business. Show Answer Correct Answer: B) The customer. ← PreviousNext →Related QuizzesMonetary QuizzesFederal Reserve Quiz 1Federal Reserve Quiz 2Federal Reserve Quiz 3Federal Reserve Quiz 4Federal Reserve Quiz 5Federal Reserve Quiz 7Federal Reserve Quiz 8Federal Reserve Quiz 9Federal Reserve Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books