[Online Document Assignment:]
EIA Activity: The Fed’s Balance Sheet, Normal and Abnormal
Click on the links on the right to answer the following questions.
Use Link 1 to answer the following questions. True or False: The Federal Reserve’s balance sheet has grown since August 2007.
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| B. |
True or False: On August 8, 2007, total assets at the Federal Reserve were equal to $2 trillion.
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| B. |
True or False: The amount of currency outstanding has continued to rise on the liabilities side of the Federal Reserve’s balance sheet.
| A. |
| B. |
True or False: Reserve balances refers to deposits of depository institutions.
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| B. |
True or False: Currency in circulation was equal to $2 billion on January 21, 2015.
| A. |
| B. |
Is it the Federal Reserve’s responsibility to bail out troubled financial institutions? Discuss.
What are the economic consequences of allowing large financial institutions to fail? Discuss.
Why should assets always be equal to liabilities? Discuss.
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