Question

The "gold standard" is a system in which ________.

people use gold as a medium of exchange

gold is imported into the United States in exchange for paper currency

gold mining firms own the right to print currency

paper currency is backed by gold

Question 12

The U.S. central bank is the government institution that ________.

monitors financial institutions, controls the money supply, and invests in foreign assets

controls the money supply and invests in foreign assets

monitors financial institutions, controls the money supply, sets certain key interest rates, and decides political targets

monitors financial institutions, controls the money supply, and sets certain key interest rates

Question 13

The Federal Reserve Bank ________.

controls the total volume of public debt in the country

comprises twenty regional banks

is controlled by the federal government

has its headquarters in Washington, D.C.

Question 14

The two key objectives of the Fed are ________.

low and predictable levels of inflation and interest rate stabilization

low and predictable levels of inflation and zero unemployment

zero inflation and zero unemployment

low and predictable levels of inflation and maximum levels of employment

Question 15

The ________ is the interest rate that banks charge each other for overnight loans.

discount window interest rate

spot interest rate

federal funds rate

subsidized banking interest rate

Answer 1

Answer-11. Correct option is 'D'

The "gold standard" is a system in which paper currency is backed by gold . People exchange theses paper notes for goods and services they required as it was more convenient to carry them rather than carrying a lot of physical gold. So every paper recepit issued had an equal amount of gold backing it.

Answer-12. Correct option is 'D'

The U.S. central bank is the government institution that monitors financial institutions, controls the money supply, and sets certain key interest rates . A central bank is a financial institution that is responsible for overseeing the monetary system and policy of a nation or group of a nations, regulating its money supply and setting interest rates.

Answer-13. Correct option is 'D'

The Federal Reserve Bank has its headquarters in Washington, D.C. . The Board of Governors of the Federal Reverse System has its headquater in Washington D.C. Its two main building are the historic Marriner S Eccles building and the William Mc Chesney Martin building.

Answer-14. Correct option is 'D'

The two key objectives of the Fed are low and predictable levels of inflation and maximum levels of employment . The monetary policy goals of Federal Reserve are to foster economic conditions that achieve both stable prices and maximum sustainable employment. Low and predictable levels of inflation promotes social welfare.

Answer-15. Correct option is 'A'

The discount window interest rate is the interest rate that banks charge each other for overnight loans. The discount window is a central bank facility that offers commercial banks very short term loan (often overnight). The discount window is also used for the central banks when they act as lender of last resort.