Question

The concept of fiduciary money means that:

Select one:

to. the nominal value of money is greater than its intrinsic value.

b. the nominal value of money is less than its intrinsic value.

c. it is not based on trust.

d. the nominal value of money is equal to its intrinsic value.

What is the most important monetary policy tool of the Federal Reserve System?

Select one:

to. The federal monetary interest rate.

b. Open market operations.

c. The federal funds rate.

d. The discount rate.

and. The reservation fee.

The Federal Reserve System like all the central banks of the world function as a banking system of:

Select one:

to. barter.

b. money with intrinsic value.

c. merchandise money.

d. fractional reserve.

The Federal Reserve system is made up of ____ regional banks.

Select one:

to. 10.

b. 14.

c. 8.

d. 12.

Answer 1

The concept of fiduciary money means that its nominal value( fixed at its creation) is much higher than its intrinsic value. Because its value is related to the production costa of banknotes and coins.

All tools are monetory tools of federal Reserve system but the Federal monetory interest rate is most important tool.

Fractional reserve system is set by the Federal reserve and is one of the Central bank's tools to implement monetory policy.

The Federal Reserve is made up of 12 regional banks. Each of the 12 Reserve banks serves its region of the country.