Page 303 - Krugmans Economics for AP Text Book_Neat

3. Which of the following is NOT a role of the Federal Reserve c. the Federal Open Market Committee
System? d. the Board of Governors of the Federal Reserve System
a. controlling bank reserves e. the Reconstruction Finance Corporation
b. printing currency (Federal Reserve notes)
5. Which of the following contributed to the financial crisis
c. carrying out monetary policy
of 2008?
d. supervising and regulating banks Section 5 The Financial Sector
a. subprime lending
e. holding reserves for commercial banks
b. securitization
4. Who oversees the Federal Reserve System? c. deleveraging
a. the presidents of the Regional Federal Reserve Banks d. low interest rates leading to a housing boom
b. the president of the United States e. all of the above

Tackle the Test: Free-Response Questions
1. a. What group determines monetary policy? 2. a. What does the Board of Governors of the Federal Reserve
b. How many members serve in this group? System do?
c. Who always serves in this group? b. How many members serve on the group?
d. Who sometimes serves in this group? Explain. c. Who appoints members?
d. How long do members serve?
e. Why do they serve a term of this length?
Answer (5 points)
f. How long does the chair serve?
1 point: The Federal Open Market Committee (FOMC)
1 point: 12
1 point: Members of the Board of Governors and the New York Federal Reserve
bank president

1 point: 4 of the other 11 Federal Reserve bank presidents
1 point: The 11 other Federal Reserve bank presidents rotate their service on
the FOMC.

module 26 The Federal Reserve System: History and Structure 261