Chapter 15- Section 1

Question 0

What does the Federal Reserve system do?

Answer 0

Provides financial services to the government, regulates financial institutions, maintains the payments system, enforces consumer protection laws, and conducts monetary policy.

Question 1

In 1913, Congress created what?

Answer 1

The Federal Reserve system (“Fed”)

Question 2

Commercial banks that are members of, and Hold stock in, the Fed

Answer 2

Member banks

Question 3

The Federal Reserve system is privately owned. True or false?

Answer 3

True

Question 4

Those chartered by the national government must belong to the Fed, what are they?

Answer 4

National banks

Question 5

What banks have a choice of joining the Fed or not?

Answer 5

Thanks chartered by state governments

Question 6

In 1935 Congress established what?

Answer 6

A board of governors for the Federal Reserve system

Question 7

What is the board there to do?

Answer 7

To regulate and supervise, set general policies for Federal Reserve and number bangs to follow, regulates certain operations of state-chartered member banks, and conducts some aspects of monetary policy

Question 8

How many independent equally powerful banks are in the Federal Reserve?

Answer 8

12

Question 9

The Reserve banks are supervised by whom?

Answer 9

The federal reserve board in Washington DC

Question 10

Who makes decisions about the growth of the money supply and the level of interest rates?

Answer 10

The Federal open market committee (FOMC)

Question 11

Who is on the Federal open market committee?

Answer 11

Seven members from the board of governors, the president of the New York District Fed, and four district Federal Reserve Bank presidents who serve one-year rotating terms

Question 12

FOMC is the Fed’s primary what?

Answer 12

Monetary policymaking body

Question 13

How many advisory committees does the Fed have?

Answer 13

Three

Question 14

What does the Federal Advisory Council do?

Answer 14

Provide advice on the Federal Reserve on matters concerning the overall health of the economy

Question 15

What does the Consumer Advisory Council do?

Answer 15

Meets with the board three times a year on consumer credit laws

Question 16

Who make up the Consumer Advisory Council?

Answer 16

Educators, consumer legal specialist, and representatives from consumer, and financial industry groups

Question 17

What does the Thrift Institutions Advisory Council do?

Answer 17

Advises on matters pertaining to the thrift industry

Question 18

All depository institutions-including commercial banks, savings banks, savings institutions, and credit unions must maintain what?

Answer 18

Reserves against their customers’ deposits

Question 19

The Fed is responsible for monitoring the reserves of state-chartered member banks while the other federal agencies monitor what?

Answer 19

The reserves of nonmember banks and other depository institutions

Question 20

What two key roles do bank reserves play?

Answer 20

Reserves cleared checks, and the Fed uses reserves to control the size of the money supply

Question 21

Corporations that own one or more banks

Answer 21

Bank holding companies

Question 22

Holding companies only banks can not do what?

Answer 22

Accept deposits or make loans

Question 23

Why did Congress give the Fed power to regulate the activities of the holding companies?

Answer 23

So the companies cannot invade restrictions

Question 24

What percent of all banking assets in the United States do foreign banks control?

Answer 24

20%

Question 25

The fan has brought authority to supervise and regulate foreign banks. What does the Fed do?

Answer 25

Examining banks annually, and is also able to terminates domestic operations of foreign banks

Question 26

The Fed _____ and _______ the international operations of United States member banks and holding companies

Answer 26

Authorizes; supervises

Question 27

The merger and two or more banks requires the approval of whom?

Answer 27

Appropriate federal banking authority.

Question 28

If the surviving bank is a state member bank who must approve the merger?

Answer 28

The Fed

Question 29

If two national banks merge who approves it?

Answer 29

The Comptroller of the Currency and a Treasury Department official

Question 30

If two nonmember state banks merged who approves it?

Answer 30

The FDIC

Question 31

What other responsibilities does the Federal Reserve have?

Answer 31

Clearing checks, enforcing consumer legislation, maintaining currency and coins, and providing financial services to the government

Question 32

Require sellers to make complete and accurate disclosures to people who buy on credit

Answer 32

Truth in Lending Act

Question 33

The Fed has the authority to extend truth-in-Lending disclosures to millions of individuals who purchase or borrow from corporations, retail stores, automobile dealers, thanks, and lending institutions

Answer 33

Regulation Z

Question 34

The paper component of the money supply, is made up of Federal Reserve notes

Answer 34

Currency

Question 35

Metallic forms of money-such as pennies, nickels, dimes, quarters, and the new Sacagawea dollar coin

Answer 35

Coins produced by the Bureau of the Mint

Question 36

What does the Fed do to coins or currency the are mutilated or cannot be used for other reasons?

Answer 36

Destroy the old money so it cannot be put back into circulation