Answer the following statements true (T) or false (F)
1. The primary function of the Fed’s Board of Governors is to formulate U.S. monetary policy.
2. The first attempt at centralized banking in the United States was the Federal Reserve System.
3. A major weakness of the National Banking System was the perverse elasticity of the money supply.
4. The Federal Reserve System was established by the National Banking Act of 1864.
5. Instead of having one central bank, the Federal Reserve in effect has twelve district banks, each with some amount of autonomy.
1. TRUE
2. FALSE
3. TRUE
4. FALSE
5. TRUE
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Economic theory and history indicate that open elections and democratically elected governments
a. are unique in their ability to produce good economic institutions. b. must be accompanied by economic institutions that will allocate resources efficiently, or otherwise democratic institutions will not survive. c. reflect only transactions that are based on mutual agreement and voluntary exchange. d. are unable to guarantee either the emergence or continuation of economic institutions and policies that will encourage productive behavior.