Question 1

Considering the Federal Reserve Districts, which of the following is true?

Accepted Answer

B

Question 2

The number of regional Federal Reserve Banks is:

Accepted Answer

The Federal Reserve System has 12 regional banks, each located in a different geographic district that is responsible for conducting monetary policy operations, supervising and regulating member banks and providing financial services to the U.S. government.

Question 3

Each president of a Reserve Bank serves for a:

Accepted Answer

Each president of a Reserve Bank serves for a five-year term, which is renewable.

Question 4

In its role as the bankers' bank, the Federal Reserve performs all of the following services, except:

Accepted Answer

The Federal Reserve does not manage U.S. Treasury borrowings. This responsibility falls under the purview of the U.S. Department of the Treasury.

Question 5

In its role as bank for the U.S. government, the Federal Reserve performs all of the following services, except:

Accepted Answer

The Federal Reserve does make discount loans, but this service is provided to financial institutions, not directly as a role for the U.S. government. The other options (issuing new currency, maintaining the U.S. Treasury's bank account, and managing U.S. Treasury borrowings) are direct services the Federal Reserve performs for the U.S. government.

Question 6

Currently the requirement of holding a non-interest-bearing reserve account at the Fed must be met by:

Accepted Answer

All banks, whether members of the Federal Reserve System or not, are required to hold non-interest-bearing reserve accounts at the Fed. This requirement is part of the monetary policy tools used by the Federal Reserve to control the money supply and is not limited to any specific type of bank.

Question 7

Member banks of the Federal Reserve System include:

Accepted Answer

The member banks of the Federal Reserve System include both nationally chartered banks and state-chartered banks that have decided to join the system. It is not limited to only nationally chartered banks or all state-chartered banks with assets exceeding $100 million.

Question 8

One reason it took so long to have a central bank in the United States is that:

Accepted Answer

The fear of centralized power was a major factor that delayed the establishment of a central bank in the United States. Many states were concerned about giving up power and control over their own currencies, and there was a longstanding debate over the balance of power between state and federal governments.

Question 9

Each of the Reserve Banks has a president who is:

Accepted Answer

Presidents of the Federal Reserve Banks are appointed by the bank's board of directors but must be approved by the Board of Governors of the Federal Reserve System. This ensures a level of oversight and integration between the regional Federal Reserve Banks and the central governing body.

Question 10

Considering state chartered banks:

Accepted Answer

Most state-chartered banks choose not to join the Federal Reserve System, as membership is optional and involves additional regulatory requirements.

Question 11

The Federal Reserve System is composed of:

Accepted Answer

The answer of The Federal Reserve System is composed of:
...

Question 12

The three branches of the Federal Reserve System include each of the following, except:

Accepted Answer

The Federal Deposit Insurance Corporation (FDIC) is not one of the three branches of the Federal Reserve System. The three branches are the Board of Governors, the Federal Open Market Committee (FOMC), and the twelve regional Federal Reserve Banks. The FDIC is an independent agency that provides deposit insurance to protect depositors in case a bank fails.

Question 13

The lines drawn to establish Federal Reserve Districts were based on:

Accepted Answer

The lines drawn to establish Federal Reserve Districts were based on economic and political forces as well as population distribution in 1914. This ensured that each district had a roughly comparable level of economic activity and population, while also taking into account political considerations such as regional balance of power.

Question 14

The largest of the regional Federal Reserve Banks is located in:

Accepted Answer

The largest of the regional Federal Reserve Banks is located in New York City and is known as the Federal Reserve Bank of New York. It is responsible for implementing monetary policy and supervising financial institutions in the Second District, which includes parts of New York, New Jersey, Connecticut, and Puerto Rico. While San Francisco serves a significant portion of the country, it is not the largest regional Federal Reserve Bank.

Question 15

How many members belong to the board of directors for each of the Reserve Banks of the Fed?

Accepted Answer

Each of the Reserve Banks of the Federal Reserve System is overseen by a board of directors consisting of nine members.

Question 16

The Reserve Banks of the Federal Reserve System are owned by:

Accepted Answer

The Reserve Banks of the Federal Reserve System are owned by the member commercial banks in their districts. These member banks hold stock in their district's Federal Reserve Bank, which entitles them to elect part of the bank's board of directors and receive a fixed 6% annual dividend.

Question 17

Prior to 1980:

Accepted Answer

Prior to 1980, nonmember banks were not required to hold non-interest-bearing reserve deposits at the Federal Reserve. Only member banks had this requirement.

Question 18

Which of the following is a false statement about the structure of the Federal Reserve System?

Accepted Answer

The structure of the Federal Reserve System reflects banker and business interests, state and regional interests, as well as government (public) and private interests. However, exporter and importer interests are not specifically reflected in the structure of the Federal Reserve System.

Question 19

The Federal Reserve Bank of New York is unique from other Reserve banks because it:

Accepted Answer

The Federal Reserve Bank of New York is unique because it is where the Federal Reserve System's portfolio is managed, including the execution of open market operations. This role is critical for implementing monetary policy.

Question 20

The Federal Reserve was created in:

Accepted Answer

The Federal Reserve was created on December 23, 1913, by the Federal Reserve Act, signed by President Woodrow Wilson.

Quiz 16: The Structure of Central Banks: The Federal Reserve and the European Central Bank