Economics s350k
Summer 2014
Practice Problem Set 2
1.Describe the origins of the Federal Reserve System.
2. Briefly describe the structure and major functions of Federal Reserve district banks.
3. Why is the NY Fed the most important of the district banks?
4. How do member banks differ from other banks? How did the difference change in 1980?
5. Who is on the FOMC? What does the FOMC do?
6. Describe the structure and function of the Board of Governors of the Federal Reserve System. Why does the chair of the Fed have so much power over monetary policy?
7. How independent is the Fed? What factors contribute to independence? What factors work against independence? Discuss arguments for and against the independence of the Fed.
