Banking Answers

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The Federal Reserve Bank of the United States is also known as the

p
people’s bank.
c
central bank.
w
world bank.
r
retail bank.
3
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best

I
Interest enables them to control the economy.
I
Interest helps them to satisfy customers.
I
Interest enables them to stockpile money.
I
Interest helps them cover business costs.
5

The Federal Reserve manages the nation’s currency and money supply by

m
manipulating interest rates and acting as a lender to banks.
o
overseeing bank collections and payments on loans.
d
dictating criteria and setting loan terms for banks.
o
offering investment advice and adjusting interest rates.
6

A responsibility the Federal Reserve has is to

A
loan money to banks during a crisis.
B
loan money to corporations for capital.
C
provide banking services to consumers.
D
provide financial services to corporations.
7

Which is the correct order of entities that benefit when banks make a profit?

A
employees, shareholders, and the economy
B
shareholders, shoppers, and the economy
C
employees, companies, and the economy
D
shareholders, companies, and the economy
8

Which are the roles of a bank? Check all that apply.Storing and holding moneyMaking purchases to create profitsLending moneyInvesting in the economyCreating money for the economy

A
Storing and holding money
B
Making purchases to create profits
C
Lending money
D
Investing in the economy
E
Creating money for the economy
9

Read the graph about mortgage interest rates and housing starts between 1978 and 1983.A conclusion that can be drawn from both graphs by looking at 1983 is that interest rates

Question illustration
d
dropped, which led to more home starts.
p
peaked, while home starts bottomed out.
c
climbed, which led to fewer home starts.
b
bottomed out, while home starts peaked.
10

How do central banks govern the banking industry? Check all that apply.by deciding how much banks must keep in reserveby overseeing the nation’s payment systemby supervising the loan process at banksby printing money for distribution to banksby responding quickly to banking crises that occurby auditing banks based on current regulations

b
by deciding how much banks must keep in reserve
b
by overseeing the nation’s payment system
b
by supervising the loan process at banks
b
by printing money for distribution to banks
b
by responding quickly to banking crises that occur
b
by auditing banks based on current regulations

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