Lesson 35 - unit 7 Flashcards
When did the Federal Reserve System begin operations?
1914
The creation of the Fed was largely in response to what?
The financial panic of 1907.
How is the Fed overseen?
By a seven member board of governors in Washington.
Who oversees the Fed’s open market operations?
The Federal Open Market Committee.
How many regional banks are in the Federal reserve system?
12
What are the Fed’s four areas of responsibility?
- Implementing Federal monetary policy
- Supervising and regulating the bank industry
- Maintaining stability in financial markets
- Providing financial services to banks, the United States government, and foreign entities.
The Fed is a _________ bank and the ___________ bank.
The Fed is a banker’s bank and the government’s bank.
What are the three tools that the Fed uses to accomplish its goals and manage monetary policy?
- Reserve requirements
- Discount rates
- Market operations
What is the Federal funds rate?
The interest that banks charge each other for overnight loans.
How do the Fed’s open market operations work?
The Fed buys U.S. Treasury bonds and other Federally issued securities to inject money into the economy, or it sells those securities to withdraw money from the economy.
