1. The Federal Reserve System
16-1 Quiz Worksheet
The Federal Reserve System

2. The Federal Reserve
Our “national bank” functions as the bankers’ bank.
The national government stores our tax money here.
When the Treasury is empty of tax money, this is where the national government goes to borrow money to continue spending.

3. Monetary Policy
Actions the Federal Reserve takes to influence the economy.

4. Board of Governors
A seven-member committee that oversees the entire system

5. Federal Reserve Districts
Twelve districts were created by the Federal Reserve Act of 1916.

6. Federal Open Market Committee
Makes key economic decisions about interest rates and the money supply.

7. Reserve Requirements
Amount of money a bank is required to keep on hand in their vaults at all times.

8. Federal Reserve Act of 1913
Passed by Congress to established the Federal Reserve System

9. Independent from the National Government
Because the system is actually owned by the member banks, the Fed has a high degree of political independence.

10. Nationally Chartered Banks
All nationally charted banks MUST be part of the federal reserve system.
That’s what makes them a “national” bank.
They will have the word “national” in their name or the initials “N.A.”, meaning “nationally affiliated”.

11. Purpose of the Act
Congress wanted to foster business growth and give banks a source of emergency cash.

12. Why Didn’t We Have a Central Bank?
Back in the 1830’s, Andrew Jackson and other people feared that a central bank would increase federal power too much.
The USA had no bank like the Fed from the 1830’s until 1913.
Andrew Jackson is honored for his principles by having his portrait on the $20 bill.