1. Which of the following is not a function of the Fed? A. Holding reserves for
ID: 1097071 • Letter: 1
Question
1. Which of the following is not a function of the Fed?
A. Holding reserves for depository institutions
B. Supervising member banks
C. Regulating the money supply
D. Lending fund to credit-worthy private firms
2. Fractional reserve banking can be though of as a bank
A. Witholding a portion of its total deposits that are not loaned out
B. Holding deposits equal to its net worth
C. Paying a fraction of its profit to depositors
D. Loaning out all of its reserves
3. When the Fed conducts open market operations, it
A. Purchases or sells government bonds issued by the U.S. Treasury
B. Is engaging in fiscal policy
C. also rasises taxes at the same time
D. Shifts the demand for money curve
Explanation / Answer
The correct answers are:
1. Which of the following is not a function of the Fed?
D. Lending fund to credit-worthy private firms
2. Fractional reserve banking can be though of as a bank
A. Witholding a portion of its total deposits that are not loaned out
3. When the Fed conducts open market operations, it
A. Purchases or sells government bonds issued by the U.S. Treasury
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