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

promote competition

make a profit

foster innovation

promote efficiency in the payments system

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

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

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

the Fed does not process commercial checks

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

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

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

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

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

all of the above

The average life of a dollar note is how long?

60 months

3 months

18 months

25 years

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

800 million

40 million

7 million

100 million

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

an Automatic Clearinghouse (ACH) transaction.

currency.

a debit.

a check.

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

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

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

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

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.

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.

correspondent

community

competing

regional

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

1/5

1/3

2/3

4/5

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

checks

funds transfer

treasury payments

automated clearinghouse (ACH)