Module 21

A function of the Federal Reserve System is to provide financial services to commercial banks such as clearing checks and holding reserves.

True

The Federal Open Market Committee consists of the Board of Governors, the President of the New York Federal Reserve Bank in addition to five other regional Federal Reserve Bank presidents.

True

The discount rate is known as the interest rate that the Federal Reserve charges on loans to banks.

True

The federal funds market allows banks who fall short of the reserve requirement to borrow funds from banks with excess reserves.

True

The Federal Reserve system is headquartered in?

Washington D.C.

A commercial bank accepts deposits and is covered by the Federal Deposit Insurance Corporation (FDIC).

True

An investment bank is a type of deposit-taking bank that specializes in issuing home loans.

False

The Federal Open Market Committee is an institution that oversees and regulates the banking system and therefore controls the monetary base.

False

The Federal Reserve was established in 1933 in response to the Great Recession.

False

Which of the following is a function of the Federal Reserve System?

Maintaining Stability