The purpose of the federal reserve is to a finance

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Chapter 7 / Exercise 3
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10. The purpose of the Federal Reserve is to a. finance government operations b. protect investors from bank failures c. protect deposits from bank failures d. control the supply of money and credit
11. The structure of the Federal Reserve includes 1. all commercial banks 2. the twelve district banks 3. the Board of Governors
12. The members of the Board of Governors are
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Chapter 7 / Exercise 3
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d. elected by the Federal Open Market Committee 13. During a period of recession, a federal government surplus should retire debt owed
14. The Federal Reserve may contract the money supply by 1. selling securities 2. buying securities 3. raising reserve requirements 4. lowering reserve requirements a. 1 and 3 b. 1 and 4 c. 2 and 3 d. 2 and 4
15. If the federal government runs a deficit and borrows from commercial banks, 1. total deposits are not affected 2. total deposits are increased 3. excess reserves are reduced 4. excess reserves are decreased
16. Anticipation of inflation discourages 1. saving 2. borrowing 3. lending 4. purchasing goods
17. If the federal government runs a surplus,
c. debt must be issued d. the Federal Reserve buys bonds

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