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Chapter 5 Federal Reserve System
Review Your Knowledge
On a separate sheet of paper or in a word processing document,
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A. decentralization
B. discount rate
C. monetary system
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E. bank run
1. Amount of money a bank must keep on hand and not invest or loan
out.
2. Allowed the government to charter private banks.
3. Central authority shares power with regional and local authorities.
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money out of the bank.
5. Time period when all bank functions were handled by state banks.
6. Affects the interest rate that the bank charges customers to borrow
money.
7. Interest rate that banks charge their best commercial customers.
8. The President of the Federal Reserve Bank in New York is always a
member.
9. Mechanism a nation uses to provide and manage money for itself.
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On a separate sheet of paper or in a word processing document,
answer each of the following questions.
11. Identify the three US politicians who were involved in establishing the
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12. In what way was the Second Bank of the US different than the First
Bank?
13. What feature of the Federal Reserve System ensures that it is a
decentralized banking system?
14. How does the Fed report to the US Congress?
15. What are the four primary functions of the Fed?
F. prime rate
G. central bank
H. reserve requirement
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J. era of free banking