03.04 The Federal Reserve

Which of the following scenarios directly involves the Federal Reserve leadership? A. Economic data for the year are released and require analysis. B. Congress creates new grants for small businesses owners. C. Consumers demand tax-reform legislation. D. President campaigns for consumer protections.

WRONG!!!! Congress creates new grants for small businesses owners. Question Information: Among the duties of the Federal Reserve's Board of Governors is to analyze economic data to help form Federal Reserve policies that reflect the state of the U.S. economy. Points earned on this question: 0 CORRECT ANSWER: Economic data for the year are released and require analysis.

Which of the following events directly involves the Federal Reserve? A. You apply for a college program. B. You review your bank account online. C. You make a purchase with a credit card. D. You withdraw cash from your bank account.

You withdraw cash from your bank account. Question Information: The Federal Reserve provides currency and coin to member banks so that they can provide it to their depositors upon request. Therefore, withdrawing cash at an ATM or from your bank teller is an event that involves the Fed. The other events listed would not involve the Fed, unless and until you take an action requiring some kind of money transfer. (In the case of the credit card, paying the credit card bill through a funds transfer from your bank would be processed through the Fed.) Points earned on this question: 5

Which of the following is the main purpose of the Federal Reserve System? A. Control the nation's money supply. B. Help new banks to open for business. C. Set the nation's yearly budget priorities. D. Provide funds for executive branch salaries.

Control the nation's money supply. Question Information: The Board of Governors consists of seven members with 14-year terms. They are appointed by the president and confirmed by the U.S. Senate to analyze economic data and supervise the Federal Reserve Banks. Points earned on this question: 5

Which organization sets monetary policy for the United States? A. Department of the Treasury B. Congress C. Federal Open Market Committee D. Federal Reserve Banks

Federal Open Market Committee Question Information: The Federal Open Market Committee meets eight times a year to discuss the U.S. economic outlook and potential adjustments to the money supply. Points earned on this question: 5

In which of the following scenarios are the Federal Reserve Banks most likely to intervene? A. A committee forms to create new consumer protection laws. B. A potential homeowner applies for a mortgage. C. Several member banks run low on currency and coin. D. Officials meet to debate presidential policy regarding economic expansion.

Several member banks run low on currency and coin. Question Information: Among the duties of the Federal Reserve Banks is the handling of coin and currency distribution to member banks. Points earned on this question: 5

Which of the following statements is true? A. There is one Federal Reserve Bank for each state of the United States. B. The leadership of the Federal Reserve System makes monetary policy decisions. C. The president decides whether a bank must obey Federal Reserve policies. D. The Federal Reserve must request approval from Congress before taking action.

The leadership of the Federal Reserve System makes monetary policy decisions. Question Information: The Federal Reserve's leadership meets regularly in Washington, D.C to make monetary policy decisions. There are 12 Federal Reserve Banks total, each overseeing a region of the United States. The president appoints and the Senate confirms the Board of Governors. However, the president does not get to exempt a bank from Federal Reserve policies. The Fed is an independent regulatory agency; therefore, it may make changes to monetary policy without consulting the president or Congress. Points earned on this question: 5