#1
Which of the following is one of the primary functions of the Federal Reserve System?
Conducting monetary policy
ExplanationGuides the nation's monetary policy to achieve economic stability and growth.
#2
Which Federal Reserve System component is responsible for supervising and regulating banks?
Board of Governors
ExplanationOversees and regulates banks to maintain a stable financial system.
#3
Which of the following is NOT a Federal Reserve System function?
Regulating the stock market
ExplanationThe Federal Reserve does not have the authority to regulate the stock market.
#4
What is the primary purpose of the Federal Reserve System's establishment?
To stabilize the economy
ExplanationEstablished to promote economic stability and prevent financial crises.
#5
Which of the following entities appoints members to the Federal Reserve Board of Governors?
The President of the United States
ExplanationThe President appoints and the Senate confirms members.
#6
What is the term used to describe the interest rate at which the Federal Reserve lends money to banks?
Discount rate
ExplanationThe interest rate set by the Fed for lending to commercial banks.
#7
Which of the following is a function of the Federal Open Market Committee (FOMC)?
Conducting open market operations
ExplanationImplements monetary policy through buying and selling of securities.
#8
What is the term used to describe the Federal Reserve's buying and selling of government securities?
Open market operations
ExplanationInvolves the purchase and sale of government securities to influence the money supply.
#9
Which of the following statements about the Federal Reserve's structure is true?
There are 12 Federal Reserve Banks
ExplanationThe Federal Reserve System comprises 12 regional banks.
#10
What is the term for the buying and selling of government securities in the open market by the Federal Reserve?
Open market operations
ExplanationInvolves the purchase and sale of government securities to influence the money supply.
#11
What is the purpose of the Federal Reserve's dual mandate?
To maximize employment and stabilize prices
ExplanationAims to achieve both full employment and stable prices in the economy.
#12
What is the term for the fraction of deposits that banks must hold in reserve?
Reserve ratio
ExplanationThe percentage of deposits that banks are required to keep as reserves.
#13
Which of the following is an example of a tool the Federal Reserve uses to conduct monetary policy?
Changing the federal funds rate
ExplanationAdjusts the federal funds rate to influence borrowing and spending.
#14
What is the term used for the interest rate at which depository institutions lend reserve balances to other depository institutions overnight on an uncollateralized basis?
Federal funds rate
ExplanationThe interest rate for overnight interbank lending.
#15
Which of the following is NOT a component of the Federal Reserve System?
Securities and Exchange Commission
ExplanationThe SEC is a separate regulatory body, not part of the Federal Reserve.