1. Part 2

2.  What are the 3 main parts of the Fed?  The Board of Governors  The 12 Reserve Banks  FOMC

3.  List two reasons for establishing the Federal Reserve Act of 1913?  Make it easier for checks to be exchanged through different parts of the country (payment system)  Provide emergency reserve of cash so that the shortage of cash at one bank didn’t disrupt the whole banking system

4.  What governing body provides national authority for the Fed?  Board of Governors

5.  How many members sits on the Board of Governors? 7

6.  Explain jobs of the Board of Governors?  Write regulations that make commercial banks financially sound  Study trends in the economy and help forecast the country’s future economic direction  Oversee the 12 federal reserve banks  Participating on the FOMC

7.  Who has voting power on the FOMC  7 BOG  President of the New York Fed  and 4 other Fed presidents

8.  What is the name of the interest rate that FOMC members target. This rate also influences other interest rates? Federal Funds Rate

9.  What is one strategy the FOMC uses to hit their target rate for the Federal Funds Rate Buying and selling of Government Securities (this action helps determine how much money banks have available to lend to you and me