1. State whether each of the following sentences is true or false based reading passage

1. There are twelve Federal Reserve Banks in the United States.

2. The Board of Governors of each Federal Reserve Bank sets its own policies.

3. The actions of the Federal Reserve System affect the amount of money in circulation in the United States.

4. Federal Reserve Banks are not empowered to buy and sell investments.

5. Margin requirements set by the Federal Reserve Board limit the amount of credit available to purchasers of stocks and bonds.

2. Answer the following questions

1. How many Federal Reserve Banks are there in the United States?

2. Who sets the policies of these banks?

3. How do Federal Reserve Banks extend credit to member banks?

4. How does the Board of Governors influence the money supply of the United States?

5. What can the Board of Governors do with United States Govern securities?

6. What can Federal Reserve Banks buy and sell?

7. How does the Federal Reserve Board influence the volume of activity on the Stock Exchange?

8. What do margin requirements limit?

9. What are reserve requirements?

10. Which institution performs the functions of the United States Federal Reserve System in your country?

3. Composition. Write a paragraph comparing and contrasting the Federal Reserve System of the United States with the Central Bank or equivalent institution that performs this role in your own country.

Building Your Vocabulary

A. Matching. Find the words in the right-hand column that are closest meaning to the words in the left-hand column

uniform market price stock for public sale authorize investment mandatory amount of buying and selling set 10. certificate of debt

a. required b. establish c. bond d. current price e. unchanging f. volume of activity g. a share of corporate capital h. open-market i. property bought for profit j. empower

B. Rewriting each of the following sentences replacing the underlined word or words with the correct form of one of the new words of this lesson

Model: The Board of Governors sets the obligatory cash ratio of holdings to liabilities.

The Board of Governors sets the mandatory cash ratio of holdings to liabilities.

1. Policies of the twelve Federal Reserve Banks are the same everywhere.

2. A group of administrators fixes the policies.

3. He has many properties bought for profit.

4. The amount of money in circulation varies with the buying and selling of stocks and bonds.

5. There has been a great amount of buying and selling on the stock exchange.