Overview of the Federal Reserve System & its Processes


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question 1 of 3

Which of the following is something that the Federal Reserve CANNOT do?

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1. Who are the customers of the Federal Reserve?

2. What happens if the Fed raises the discount rate?

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About This Quiz & Worksheet

The Federal Reserve plays a significant role in how money is handled in the U.S. This quiz and worksheet can help check what you know about the duties of the Federal Reserve, its customers and the effects of increasing rates and buying back bonds.

Quiz & Worksheet Goals

With this quiz/worksheet combo, you can assess your understanding of:

  • Actions the Federal Reserve are prohibited from doing
  • Which entity is the customer of the Federal Reserve
  • Consequences of raising the discount rate
  • What happens when the Fed buys back federal bonds
  • The definition of reserve ratio

Skills Practiced

Use this quiz to check how well you can practice these skills:

  • Distinguishing differences - compare and contrast topics from the lesson, such as the consequence of the Federal reserve increasing the discount rate versus buying back federal bonds
  • Information recall - access the knowledge you've gained regarding how the Federal Reserve works
  • Knowledge application - use your knowledge to answer questions about the responsibilities of the Federal Reserve

Additional Learning

You can learn more about the Federal Reserve by watching the corresponding video called Overview of the Federal Reserve System & Its Processes. The following objectives are addressed in the lesson:

  • Explains the purpose of a central bank
  • Discusses how the Federal Reserve manages money supply
  • Covers the requirements for cash reserves
  • Details how the Federal Reserve loans money
  • Discusses open market operations