Lesson 54 pg. 154 - 158

Question 1

Describe the United States Department of the Treasury

Answer 1

> established during President Washington’s administration and had Alexander Hamilton as its first secretary
source of part of American money supply
Bureau of the Mint and Bureau of Engraving and Printing are parts of Treasury Department
prints Federal Reserve notes and delivers to Federal Reserve for distribution

Question 2

Describe the Federal Reserve System

Answer 2

> holds actual responsibility for money supply
is a private agency
central banking network with majority of America’s money supply under its control
not under authority of federal government
independent agency that does not answer directly to its citizens of United States
chief aim is to form America’s monetary policy and thereby control the money supply
able to increase or decrease the amount of money in circulation through its three main tools–open market operations, reserve ratios, and discount rates

Question 3

List the three main components of the core of the Federal Reserve System

Answer 3

> Board of Governors - appointed by President and confirmed by US Senate; it is their duty to operate America’s banking system
Federal Open Market Committee - makes decisions regarding the buying and selling of government securities, such as Treasury notes, bills, and bonds
Federal Reserve Banks - (one for each of the nation’s twelve Federal Reserve districts) influence policies of private commercial banks with which you are familiar

Question 4

Define recession

Answer 4

recession - a period, usually six months or longer, during which the economy recedes, or declines