Question 5 a correct answer the federal reserve act

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Question 5 a. Correct answer. The Federal Reserve Act granted the Federal Reserve Board the authority to issue paper money backed by commercial paper, such as promissory notes of businesspeople, and to increase or decrease the amount of money in circulation by altering the interest rates charged to member financial institutions. b. The Federal Reserve Board was not granted the power to close weak banks by the Federal Reserve Act of 1913. The permanent authority to close weak or insolvent banks was granted to the Federal Deposit Insurance Corporation (FDIC) under the Banking Act (Glass-Steagall Act) of 1933. c. The Federal Reserve Board was not granted the power to take the United States off the gold standard by the Federal Reserve Act of 1913. The United States remained on the gold standard formally until President Richard Nixon ended trading of gold at the fixed price of $35/ounce in 1971. d. The power to guarantee bank deposits against bank failures was not given to the Federal Reserve Board by the Federal Reserve Act of 1913. This authority was granted to the Federal Deposit Insurance Corporation (FDIC) through the Banking Act (Glass-Steagall Act) of 1933. e. The power of the government to collect income taxes directly from employees’ paychecks was not authorized by the Federal Reserve Act of 1913. The power to collect income taxes directly from employee paychecks was granted through statutory authority granted to the Bureau of Internal Revenue (the forerunner of the Internal Revenue Service) during the World War II years. Question 6 a. The Federal Trade Commission was established in 1914 to investigate and eliminate unfair and discriminatory trade practices, including unlawful competition, false advertising, mislabeling, adulteration of products, and bribery. President Wilson and Congress believed that the monopolistic stranglehold of large interstate industries, such as meatpacking, could be broken by empowering this new executive branch agency with the legal instruments to prohibit these industries from engaging in anti-competitive, deceptive, and objectionable trade practices. b. The elimination of unfair business competition and bribery represented two of the regulatory goals of the Federal Trade Commission. c. Correct answer. The prohibition on the sale of stocks without full, accurate disclosure and the establishment of a federal agency to enforce stock and bond sale disclosure requirements did not occur until Congressional passage of the Federal Securities Act (1933) and the Securities and Exchange Commission Act (1934) during the New Deal reform era of the 1930s.
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d. The elimination of false and misleading advertising was among the harmful business practices targeted by the legislation establishing the Federal Trade Commission.
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