Answer the following questions:
a. What are the 3 functions of money?
b. The one-dollar-bill in your pocket/purse is a fiat money. Why?
c. List the 2 ways of measuring the money supply of the United States. In addition, list the components of each measurement of money supply.
d. True or False : Of the 2 measurements of money supply, M1 is broader. (If you answer false, you must provide a corrected statement.)
e. What is another term for time deposits?
f. Fill in the Blank: Fifth Third Bank borrowed money from the Federal Reserve Bank of Cleveland. The interest rate charged by the Federal Reserve Bank is called _______________.
g. Fill in the Blank: Ken owns a billion dollar company and has a wonderful credit history. When Ken borrows money for his business, Ken will more likely pay an interest rate specifically referred to as __________________.
h. True or False: Historically, the federal funds rate is lower than the discount rate. (If false, you must provide a corrected statement.)
i. How many regional Federal Reserve Banks are there in the United States?
j. List the 6 functions of the 'Fed.'
k. Who is the current chair of the Fed?
l. True or False: The chair of the 'Fed' is elected by the public. (If false, provide a corrected statement.)
m. What is the main objective of the Fed when implementing 'tight monetary policy?'
n. What is the main objective of the Fed when implementing 'looser (easy) monetary policy?'
o. True or False: It is logical for the Fed to decrease the discount rate if the economy is experiencing recession. (If false, provide a corrected statement.)
p. True or False: It is logical for the Fed to conduct an open market sale of securities if the economy is experiencing a relatively high inflation rate. (If false, provide a corrected statement.)
Answer the following questions:
a. What are the 3 functions of money?
b. The one-dollar-bill in your pocket/purse is a fiat money. Why?
c. List the 2 ways of measuring the money supply of the United States. In addition, list the components of each measurement of money supply.
d. True or False : Of the 2 measurements of money supply, M1 is broader. (If you answer false, you must provide a corrected statement.)
e. What is another term for time deposits?
f. Fill in the Blank: Fifth Third Bank borrowed money from the Federal Reserve Bank of Cleveland. The interest rate charged by the Federal Reserve Bank is called _______________.
g. Fill in the Blank: Ken owns a billion dollar company and has a wonderful credit history. When Ken borrows money for his business, Ken will more likely pay an interest rate specifically referred to as __________________.
h. True or False: Historically, the federal funds rate is lower than the discount rate. (If false, you must provide a corrected statement.)
i. How many regional Federal Reserve Banks are there in the United States?
j. List the 6 functions of the 'Fed.'
k. Who is the current chair of the Fed?
l. True or False: The chair of the 'Fed' is elected by the public. (If false, provide a corrected statement.)
m. What is the main objective of the Fed when implementing 'tight monetary policy?'
n. What is the main objective of the Fed when implementing 'looser (easy) monetary policy?'
o. True or False: It is logical for the Fed to decrease the discount rate if the economy is experiencing recession. (If false, provide a corrected statement.)
p. True or False: It is logical for the Fed to conduct an open market sale of securities if the economy is experiencing a relatively high inflation rate. (If false, provide a corrected statement.)
