Chapter 2 - Money & the Monetary System: Practice Questions

The Federal Reserve System includes how many geographical districts?

12

The Federal Reserve was established in what year?

1913

The minimum interest rate set by the Federal Reserve for lending to other banks is known as the?

Discount rate

Which of the following has board powers in controlling credit and the amount of money in circulation in the United States?

Federal Reserve

Money that is easily obtainable is considered?

M1

The supply of less liquid money is considered?

M2

The supply of money which is the least liquid is considered?

M3

Which of the following are covered under TILA?

Real estate loans under 50,000 Personal loans under 50,000 consumer loans under 50,000

The Truth in Lending Act is also known as?

Regulation Z

This refers to a type of loan granted to individuals with poor credit histories (often below 600), who, as a result of their deficient credit ratings , would not be able to quality for conventional mortgages?

Sub-prime mortgage

Which of the following is covered under Title 1 of the Consumer Protection Act of 1968?

TILA

What happens when the Federal Reserve decreases the bank's required reserves amount?

There is a boost in economic activity

The economy generally grows when which of the following occurs?

There is an increase in the money supply

The more money an individual has, the more purchasing power they have?

True

As the cost of borrowing money increases, the amount of lending activity will?

decrease