Chapter 14

The Federal Reserve Banks are owned by the:

Banks themselves

The Federal Reserve System consists of which of the following?

Board of Governors, FOMC, 12 Federal Reserve Banks, Commercial Banks, Thrift Institutions, The Public

The use of a credit card is most similar to:

A short term loan

The M1 money supply is composed of:

All the coins and paper money in the hands of the public, and all checkable deposits (all deposits in commercial banks and thrift or savings institutions on which checks of any size can be drawn)

Holding the money deposits of businesses and households and making loans to the public are the basic functions of:

Commercial banks and thrift (savings and loan)

1. The Federal backing for the money in the United States comes from:

Control of money supply

The Federal Reserve System performs many functions but its most important one is:

Control of money supply

Which is the most important function of the Federal Reserve System?

Control of money supply, managing money supply

Which would be a recent development in the banking industry

Conversion of financial institutions

Currency and checkable deposits are:

Debts of a commercial bank and the federal reserve system

Coins and paper money are:

Debts of the federal government

One major advantage of the medium of exchange function of money is that it allows society to

Escape the barter system

Paper money in the United States comes in the form of:

Federal reserve notes

The basic requirement of money is that it be:

Generally accepted as a medium of exchange

One major advantage of credit cards used for transactions is that they:

Let's you post pone payment

The functions of money are to serve as a:

Medium of exchange, unit of account and a store of value

United States currency has value primarily because it:

Relatively scarce, legal tender, acceptable for goods and services

The primary responsibility of the Federal Open Market Committee (FOMC) is:

Setting the feds monetary policy and directing the buying and selling of government security

When a consumer wants to compare the price of one product with another, money is primarily functioning as a:

Unit of account

When money serves as a means for determining the relative worth of goods, services, and resources, it is functioning as a:

Unit of account