The Fed
What is the main purpose of the Federal Reserve?
to maintain a stable and healthy US economy
how many regional federal reserve banks are there
12
what do commercial banks do with money deposited by customers
lend it to borrowers or businesses
what happens to borrowing when interest rates fall
borrowing increases
what nickname do people use for the federal reserve
the fed
what year was the federal reserve created
1913
where is the board of governors located
Washington DC
what is the "discount rate"
interest rate the fed charges banks for short term loans
what happens to consumer spending when interest rates rise
spending decreases
who is the current chair of the federal reserve (2025)
Jerome Powell
who signed the federal reserve act
president Woodrow Wilson
how many members serve on the board of governors
7
how do banks benefit from being part of the federal reserve system
they can borrow from the fed and receive clearing services
what is the federal funds rate
interest rates banks charge each other for overnight loans
what 2 goals make up the feds dual mandate
stable prices and maximum employment
which law created the federal reserve system
federal reserve act
who leads the federal reserve system
chair of the federal reserve
what happens when the fed increases reserve requirements
banks must hold more money in reserve and can lend less
how does raising interest rates help fight inflation
it slows borrowing and spending reducing price pressure
what year did the fed start printing the modern US dollar design
1914
why is the federal reserve called the central bank
it manages the nations money supply
what is the FOMC responsible for
setting monetary policy, including interest rate targets
why is the fed considered the "lender of last resort"
it lends to banks during crises to prevent financial collapse
what is the difference between nominal and real interest rates
nominal is not adjusted for inflation while real is
what's one way the fed can stimulate the economy during a recession
lowering interest rates or buying securities