Identify the correct statement about the Fed.
a. When the Federal Reserve System was established, all banks were required to become members
b. When the Federal Reserve System was established, only federally chartered banks were allowed to join.
c. When the Federal Reserve System was established, only federally chartered banks were required to join.
d. When the Federal Reserve System was established, most banks joined even though none were required to join.
e. When the Federal Reserve System was established, membership was required for all banks in some states, but not in others.
c
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The rate of interest that a bank states as its interest rate is the real rate of interest
Indicate whether the statement is true or false
? Newspaper recycling has been highly successful—perhaps too successful, given that many households gather and return their newspapers to recycling centers. The amount of newspapers recycled has dramatically increased, along with the number of recycling plants. Yet newspapers prefer regular newsprint over recycled newsprint, so the demand for recycled newsprint has remained essentially unchanged. The result of this for the recycled newsprint market is
A. a decrease in the supply and a higher price for recycled newsprint. B. an increase in the supply and a lower price for recycled newsprint. C. an increase in the supply and a higher price for recycled newsprint. D. a decrease in the supply and an increase in the demand for recycled newsprint.
The Fed controls bank lending and thus the process of money creation through its power to
A) alter legal reserve requirements and the dollar amount of reserves. B) establish maximum and minimum interest rates on bank loans and deposits made with banks. C) oversee the lending criteria banks use. D) suspend the charter of banks whose lending activities contribute to an excessive rate of increase in the money supply.
Even though the average income in the United States has continued to grow, the poverty rate has increased to over 20% since the early 1970s
a. True b. False Indicate whether the statement is true or false