1. What is the MOST important responsibility of the U.S. Federal Reserve System? a) to serve as a bank for the U.S. government b) to oversee circulation of hard currency c) to set U.S. monetary policy d) to set U.S. fiscal policy 2. How does the Fed manage U.S. monetary policy? a) by printing or pulling money, according to needed supply b) by influencing banks abilities to make loans c) by authorizing and closing banks d) by loaning money to banks 3. Who sets the prime interest rate? a) FDIC b) the Fed c) Congress d) major banks 4. In which of the following scenarios would the government want to decrease the amount of money that banks can lend? a) pulling out of a recession b) accelerating inflation c) reversing deflation d) curbing inflation 5. What is inflation? a) an increasing money supply b) a decreasing money supply c) a lowering of prices d) a rising of prices PAGE 1
6. When the Fed buys securities, what effect does it have on the flow of money into the system? a) The Fed does not buy securities. b) It has no effect on the flow. c) It decreases the flow. d) It increases the flow. 7. Which of the following is an example of how the government exercises fiscal policy in the United States? a) purchasing securities b) selling treasury notes c) adjusting interest rates d) spending for federal defense 8. What is the purpose of the FDIC? a) to protect consumers from insurance fraud b) to insure consumers against bank failures c) to set monetary policy d) to set fiscal policy 9. If the government borrows more money, what will happen to the price of it? a) The price will decrease. b) The price will increase. c) The equilibrium price will go down. d) The equilibrium price will stay the same. 10. Which banks does the FDIC regulate in the United States? a) all banks b) only federal banks c) only Federal Reserve System banks d) only credit unions and mortgage banks PAGE 2
ANSWER KEY 1. c 3. d 5. d 7. d 9. b 2. b 4. d 6. d 8. b 10. c COMMON CORE STATE STANDARDS CCSS.ELA-Literacy.CCRA.R.1 Read closely to determine what the text says explicitly and to make logical inferences from it; cite specific textual evidence when writing or speaking to support conclusions drawn from the text. CCSS.ELA-Literacy.CCRA.R.3 Analyze how and why individuals, events, and ideas develop and interact over the course of a text CCSS.ELA- Literacy.CCRA.R.4 Interpret words and phrases as they are used in a text, including determining technical, connotative, and figurative meanings, and analyze how specific word choices shape meaning or tone. CCSS.ELA- Literacy.CCRA.R.7 Integrate and evaluate content presented in diverse formats and media, including visually and quantitatively, as well as in words. CCSS.ELA- Literacy.CCRA.R.8 Delineate and evaluate the argument and specific claims in a text, including the validity of the reasoning as well as the relevance and sufficiency of the evidence. CCSS.ELA-Literacy.CCRA.R.10 Read and comprehend complex literary and informational texts independently and CCSS.ELA-Literacy.RI.9-10.1 Cite strong and thorough evidence to support analysis of what the text says explicitly as well as inferences drawn from the text. CCSS.ELA-Literacy.RI.9-10.2 Determine a central idea of a text and analyze its development over the course of the text, including how it emerges and is shaped and refined by specific details; provide an objective summary of the text. CCSS.ELA-Literacy.RI.9-10.3 Analyze how the author unfolds an analysis or series of ideas or events, including the order in which the points are made, how they are introduced and developed, and the connections that are drawn between them. CCSS.ELA-Literacy.RI.9-10.4 Determine the meaning of words and phrases as they are used in a text, including figurative, connotative, and technical meanings; analyze the cumulative impact of specific word choices on meaning and tone (e.g., how the language of a court opinion differs from that of a newspaper). CCSS.ELA-Literacy.RI.9-10.8 Delineate and evaluate the argument and specific claims in a text, assessing whether the reasoning is valid and the evidence is relevant and sufficient; identify false statements and fallacious reasoning. CCSS.ELA-Literacy.RI.9-10.10 By the end of grade 9, read and comprehend literary nonfiction in the grades 9 10 text complexity band proficiently, with scaffolding as needed at the high end of the range. By the end of grade 10, read and comprehend literary nonfiction at the high end of the grades 9 10 text complexity band independently and PAGE 3
COMMON CORE STATE STANDARDS (CONTINUED) CCSS.ELA-Literacy.RI.11-12.1 Cite strong and thorough textual evidence to support analysis of what the text says explicitly as well as inferences drawn from the text, including determining where the text leaves matters uncertain. CCSS.ELA-Literacy.RI.11-12.2 Determine two or more central ideas of a text and analyze their development over the course of the text, including how they interact and build on one another to provide a complex analysis; provide an objective summary of the text. CCSS.ELA-Literacy.RI.11-12.3 Analyze a complex set of ideas or sequence of events and explain how specific individuals, ideas, or events interact and develop over the course of the text. CCSS.ELA-Literacy.RI.11-12.4 Determine the meaning of words and phrases as they are used in a text, including figurative, connotative, and technical meanings; analyze how an author uses and refines the meaning of a key term or terms over the course of a text (e.g., how Madison defines faction in Federalist No. 10). CCSS.ELA-Literacy.RI.11-12.7 Integrate and evaluate multiple sources of information presented in different media or formats (e.g., visually, quantitatively) as well as in words in order to address a question or solve a problem. CCSS.ELA-Literacy.RI.11-12.10 By the end of grade 11, read and comprehend literary nonfiction in the grades 11 CCR text complexity band proficiently, with scaffolding as needed at the high end of the range. By the end of grade 12, read and comprehend literary nonfiction at the high end of the grades 11 CCR text complexity band independently and CCSS.ELA-Literacy.RH.9-10.3 Analyze in detail a series of events described in a text; determine whether earlier events caused later ones or simply preceded them. CCSS.ELA-Literacy.RH.9-10.4 Determine the meaning of words and phrases as they are used in a text, including vocabulary describing political, social, or economic aspects of history/social science. CCSS.ELA-Literacy.RH.9-10.7 Integrate quantitative or technical analysis (e.g., charts, research data) with qualitative analysis in print or digital text. CCSS.ELA-Literacy.RH.9-10.8 Assess the extent to which the reasoning and evidence in a text support the author s claims. CCSS.ELA-Literacy.RH.9-10.10 By the end of grade 10, read and comprehend history/social studies texts in the grades 9 10 text complexity band independently and CCSS.ELA-Literacy.RH.11-12.3 Evaluate various explanations for actions or events and determine which explanation best accords with textual evidence, acknowledging where the text leaves matters uncertain. CCSS.ELA-Literacy.RH.11-12.4 Determine the meaning of words and phrases as they are used in a text, including analyzing how an author uses and refines the meaning of a key term over the course of a text (e.g., how Madison defines faction in Federalist No. 10). PAGE 4
COMMON CORE STATE STANDARDS (CONTINUED) CCSS.ELA-Literacy.RH.11-12.7 Integrate and evaluate multiple sources of information presented in diverse formats and media (e.g., visually, quantitatively, as well as in words) in order to address a question or solve a problem. CCSS.ELA-Literacy.RH.11-12.8 Assess the extent to which the reasoning and evidence in a text support the author s claims. CCSS.ELA-Literacy.RH.11-12.10 By the end of grade 12, read and comprehend history/social studies texts in the grades 11 CCR text complexity band independently and PAGE 5