https://openstax.org/books/principles-macroeconomics-2e/pages/15-1-the-federal-reserve-banking-system-and-central-banks

DARNELL: Hi, Felix. I would like to ask you about leverage. The Professor was talking about the advantages and disadvantage of banks using leverage. From what I understand, high bank leverage was one of the key ingredients in the housing bubble and the financial crisis that followed. What I do not understand is that, if leverage is so risky, why wouldn't the government just forbid banks from using leverage at all and thus eliminate the possibility of such a crisis in the future? FELIX: Darnell, this is not an easy question. Regulators and bankers are still searching for strategies that would benefit both investors and bank customers. I'll try to help you understand the trade-off of using leverage versus abandoning it completely. But first, let's make sure you understand what leverage is. DARNELL: In banking, leverage means that banks can use Increase the potential return on reserves to purchase assets that offer higher returns and thus deposits reserves stockholders' equity FELIX:…

The Federal Reserve Board influences the national economy by adjusting interest rates. 1) True 2) False

A central bank such as the Fed is different from other banks and financial institutions in that it does not____ A)provide service to individuals or businesses B) generate, stimulate, or hurt the economy  C)provide any concrete banking service  D) have multiple locations throughout the country