In Its Role as Bank for the U

question 35

Multiple Choice

In its role as bank for the U.S. government, the Federal Reserve performs all of the following services, except:

• A) issuing new currency.
• B) making discount loans.
• C) maintaining the U.S. Treasury's bank account.
• D) managing U.S. Treasury borrowings.

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Definitions:

Collusive Behavior

Actions among firms to limit competition, set prices, or otherwise interfere with free market operations, often illegally or in secret.

Cartel

An association of independent businesses organized to regulate production, pricing, and marketing of goods by the members to monopolize a market.

Economic Efficiency

A state where resources are allocated in a manner that maximizes the production of goods and services without wasting any resources.

Economies of Scale

Financial advantages gained by firms due to their operational size, where a greater volume of production usually correlates with a lower cost for each output unit.