The Federal Reserve offers financial services to banks and the U.S. government for all of the following reasons except to:

A. promote competition

B. make a profit

C. foster innovation

D. promote efficiency in the payments system

The correct answer is B

Which of the following statements about the Federal Reserve is not true?

A. regional Reserve Banks are responsible for meeting public demand for currency and coin within their districts

B. vaults at Reserve Banks process and store currency and coin for financial institutions

C. the Fed does not process commercial checks

D. Reserve Banks ensure that fluctuations in the demand for currency and coin do not disrupt the banking industry

The correct answer is C

Which of the following statements about the Fed's involvement in electronic banking is true?

A. each year the Fed conducts billions of transactions valued in the trillions of dollars

B. funds transfers are originated and received through a sophisticated telecommunications network called FedWire

C. financial institutions can move their balances at the Fed or send funds to another institution through electronic banking

D. all of the above

The correct answer is D

The average life of a dollar note is how long?

a. 60 months

b. 3 months

c. 18 months

d. 25 years

The correct answer is c

On average, a Federal Reserve Bank's cash department verifies approximately how many notes annually?

a. 800 million

b. 40 million

c. 7 million

d. 100 million

The correct answer is a

A one-time written order that instructs a financial institution to transfer funds from your account to the account of an individual or business is called

a. an Automatic Clearinghouse (ACH) transaction.

b. currency.

c. a debit.

d. a check.

The correct answer is d

Just after you write a check at a store to make a purchase,

a. your checking account at a financial institution is instantly reduced by the value of the check.

b. the store manager sends the check to a Federal Reserve Bank to be processed.

c. the store manager deposits the check in the store's account at a local financial institution.

d. your checking account at a financial institution is increased by the value of the check after it has been processed by a Federal Reserve Bank or a correspondent bank.

The correct answer is c

Outside of the Federal Reserve System, a ____________ bank accepts checks from a financial institution with which it has a relationship, credits the depositing financial institution's account and forwards the checks to the financial institution on which they were drawn.

a. correspondent

b. community

c. competing

d. regional

The correct answer is a

The Federal Reserve System processes about ___ of all checks written in the country.

a. 1/5

b. 1/3

c. 2/3

d. 4/5

The correct answer is b

What is the electronic payment delivery system most often used to process low-dollar recurring retail payments?

a. checks

b. funds transfer

c. treasury payments

d. automated clearinghouse (ACH)

The correct answer is d