Question

Question 6 

The Federal Reserve System is under the strict control of

Question 6 options:

	the executive branch
	the legislative branch
	the judicial branch
	the International Monetary Fund
	none of the above

Question 7 

The Fed typically increases the money supply by

Question 7 options:

	selling government bonds
	buying government bonds
	selling government loans
	printing more currency
	buying government loans

Question 8

If the Federal Reserve wishes to increase the money supply by $30,000 and the reserve requirement ratio is 0.4, how big a purchase of bonds will the Fed need to make

Question 8 options:

	$75,000
	$12,000
	$1,000
	$30,000
	$3,000

Question 9

The Federal Deposit Insurance Corporation helps to reduce the number of bank failures because

Question 9 options:

	of its rule that individuals cannot make a run on a bank
	it promises to reimburse up to $10,000 of lost deposits in an account
	depositors will be secure in the fact that their deposits are protected
	it pays attention to the changes in the economy
	it is a soothing agent for individuals who have accounts over $100,000

Answer 1

6-federal open market committee and president appointed the board of governors.

So none of the above statement is correct.

7-fed typically increases the money supply by buying government bonds.

So option E is the correct statement.

8-increase in money supply=reserve injection×(1/reserve requirements ratio.)

9-FDIC is maintained the confidence in the banking system.

FDIC helps to reduce the number of bank failure because depositors will be secure in the fact that their deposit are protected.

So option C is the correct statement.

So 30000=reserve injection×(1/0.4)

So reserve injection=$12000

8-