Economics Chapter 16 Test Review

This series of serious bank runs finally convinced Congress to act and address concerns within the nation's banking system, resulting in the Federal Reserve Act of 1913.

• Second Bank of 1836
• Panic of 1907
• Scare of 1900
• Stock Market Crash

The actions the Federal Reserve takes to influence the level of real GDP and the rate of inflation in the economy.

• Board of Governors
• Federal Reserve Districts
• monetary policy
• Federal Open Market Committee

Why does the Federal Reserve System have a higher degree of political independence?

• the system has only advisory power
• it is divided into geographical districts
• the governors are appointed for life terms
• the system is owned by the banks

This is a seven member board that oversees the Federal Reserve System.

• Board of Governors
• Federal Reserve Districts
• House of Representatives
• Board of Regents

How many Federal Reserve Districts are there?

• 8
• 12
• 24
• 52

What is the subject of Federal Open Market Committee decisions?

• appointment of members of the Federal Reserve's Board of Governors
• chartering of new banks and other lending institutions
• level of interest rates and growth of the money supply
• scheduling of banking days and hours for member banks

Who appoints the members of the Board of Governors of the Federal Reserve?

• the state legislatures of the states represented
• the state governors
• the U.S. Senate
• the U.S. President

What banks must join the Federal Reserve system?

• all nationally chartered banks
• all state-chartered banks
• all banks of any kind
• no banks must join; membership is voluntary

This is the process by which banks record whose account gives up money and whose account receives money when a customer writes a check.

• Check Bouncing
• Checks and Balances
• Check clearing
• Discount Rate

What does a "fractional reserve banking system" mean?

• one that uses fractional paper currency as well as coins
• one that is required to report daily deposits to the Federal Reserve
• one that must keep most deposited money in reserve
• one that keeps only a small part of customers' deposits on hand