Multi-Q Introduction

Fed Facts!Fed Facts!Welcome to …Welcome to …

Produced byThe Federal Reserve Bank of San Francisco

Produced byThe Federal Reserve Bank of San Francisco

Game Game RulesRulesGame Game RulesRules Fed Facts RulesFed Facts Rules

1.1. Points are collected as a team.Points are collected as a team.

2.2. Each player must answer the question Each player must answer the question without the help from teammates.without the help from teammates.

3.3. If a question is answered correctly, If a question is answered correctly, team one adds those points to their team one adds those points to their score.score.

4.4. If a question is answered incorrectly, If a question is answered incorrectly, the team score does not change and the team score does not change and the question goes to team two. the question goes to team two.

Game Game RulesRulesGame Game RulesRules

There will be three rounds:

• Beginning Round

• Double Round

• Final Round

Fed Facts RulesFed Facts Rules

MultiQ ChoicesMultiQ ChoicesMultiQ ChoicesMultiQ ChoicesCurrency:Currency:

The Early The Early YearsYears

MonetaryMonetary

PolicyPolicyFinancial Financial ServicesServices

Fun Facts Fun Facts About MoneyAbout Money

““Check” Check”

It OutIt Out

10 10 10 10 10

20 20 20 20 20

30 30 30 30 30

40 40 40 40 40

50 50 50 50 50

Fed Facts: BeginningFed Facts: BeginningTO DOUBLE ROUNDTO DOUBLE ROUNDTO DOUBLE ROUNDTO DOUBLE ROUND

1:101:101:101:10

In addition to currency, name three other

things U.S. colonists used as money.

CLICK TO CHECKCLICK TO CHECK

1:10 1:10 AnswerAnswer1:10 1:10 AnswerAnswer T h e c o r r e c t a n s w e r i s …T h e c o r r e c t a n s w e r i s …

Tobacco, Corn, Tobacco, Corn, Wampum Beads, Wampum Beads,

Foreign CoinsForeign Coins

CLICK TO PLAY AGAINCLICK TO PLAY AGAIN

10

1:201:201:201:20

Why are there “holes” in some of

the notes from Colonial times?



People often cut the seals People often cut the seals from currency notes and from currency notes and

affixed them to land affixed them to land ownership documents to ownership documents to

make them look more make them look more “official.”“official.”


20

1:301:301:301:30

Fractional currency was used during the

Civil War as a substitute for what?



Coins – metal was being Coins – metal was being diverted to the war diverted to the war

efforteffort


30

1:401:401:401:40

Why was Confederate currency subject to such inflation during

the Civil War era?



The North printed a lot of The North printed a lot of Confederate currency and Confederate currency and

flooded the Southern flooded the Southern states with it states with it


40

What were the small square coupons around

the edge of Interest Bearing Notes used for?



Collecting interest – people Collecting interest – people would cut off the coupons would cut off the coupons and submit them to the and submit them to the Treasury Department for Treasury Department for

payment of interestpayment of interest


50

2:102:102:102:10

What are the two goals of Monetary

Policy?



Maximum employment Maximum employment

and and

stable pricesstable prices


10

2:202:202:202:20

What is the difference between the Fed

funds rate and the discount rate?



The The Fed fundsFed funds rate is the rate that rate is the rate that commercial banks charge one commercial banks charge one

another for loans. another for loans.

The The discount ratediscount rate is the rate is the rate charged by the Fed to member charged by the Fed to member

banks that borrow funds from the banks that borrow funds from the Discount Window.Discount Window.


20

2:302:302:302:30

To stimulate the economy, the Fed will

________(raise or lower) the Fed funds

target rate.



Lower – this makes Lower – this makes borrowing cheaper and borrowing cheaper and thus is an incentive for thus is an incentive for people and businesses people and businesses

to borrow.to borrow.


30

2:402:402:402:40

What does “FOMC” stand for?

Double your points on this question if you know how many total members the

FOMC has.



Federal Open Market CommitteeFederal Open Market CommitteeThe FOMC has The FOMC has 1212 total members total members

(7 Board of Governors + Federal Reserve Bank of New York (7 Board of Governors + Federal Reserve Bank of New York president + 4 rotating Reserve Bank presidents)president + 4 rotating Reserve Bank presidents)

While all 12 Reserve Bank presidents While all 12 Reserve Bank presidents participate in every FOMC meeting, only 5 participate in every FOMC meeting, only 5

Reserve Bank presidents may vote.Reserve Bank presidents may vote.


40

2:502:502:502:50

Is the Federal Reserve System “centralized” or “decentralized”?



Both – Individual Reserve Both – Individual Reserve banks have some control, banks have some control, but this is balanced by the but this is balanced by the

Board of Governors’ Board of Governors’ centralized inputcentralized input


50

What are the four main security features of the

new 2004 Series $20 bill?



3:10 3:10 AnswerAnswer3:10 3:10 AnswerAnswer T h e c o r r e c t a n s w e r i s …T h e c o r r e c t a n s w e r i s …T h e c o r r e c t a n s w e r i s …T h e c o r r e c t a n s w e r i s …

• Security threadSecurity thread

• Color-shifting inkColor-shifting ink

• WatermarkWatermark

• MicroprintingMicroprinting10

3:203:203:203:20

Which U.S. currency has the most usage?



The $1 bill followed The $1 bill followed closely by the $20 bill.closely by the $20 bill.

20CLICK TO PLAY AGAINCLICK TO PLAY AGAIN

3:303:303:303:30

What is the Automatic Clearing

House (ACH)?




ACH is a clearing house where ACH is a clearing house where debits and credits are collected debits and credits are collected prior to sending to participating prior to sending to participating banks. It is used for common banks. It is used for common electronic payments like an electronic payments like an

individual’s mortgage payment. individual’s mortgage payment.

30

3:403:403:403:40

What two materials are used to make the paper on which U.S. currency is printed?



Cotton and LinenCotton and Linen


3:503:503:503:50

What does the Fed do if it detects a counterfeit note?



The Fed forwards the The Fed forwards the note to the note to the

Secret Service for Secret Service for investigationinvestigation


50

4:104:104:104:10

Name the government agency that prints our

currency notes.



The BEP (The Bureau of The BEP (The Bureau of Engraving and Printing).Engraving and Printing).


10

4:204:204:204:20

How long does the average $100 note stay in circulation?




9 years9 years

20

4:304:304:304:30

Name the three non-presidents that have appeared on Federal

Reserve Notes.




• Alexander HamiltonAlexander Hamilton

• Ben FranklinBen Franklin

• Salmon ChaseSalmon Chase

30

4:404:404:404:40

On the great Seal of the U.S., the eagle is holding

arrows in one talon and an olive branch in the other—

what do these symbols represent?




The arrows represent that The arrows represent that our country stands ready our country stands ready

to defend its freedom to defend its freedom while the olive branch while the olive branch represents that we are represents that we are always pursuing peace.always pursuing peace.

40

4:504:504:504:50

What was the first state in the 50 State

Quarter Program?



Delaware, the first state Delaware, the first state to ratify the U.S. to ratify the U.S.

Constitution. Constitution.


50

5:105:105:105:10

What is the name of the Congressional legislation passed in October, 2004

legalized digital images of checks?



Check 21—checking for Check 21—checking for the 21the 21stst Century. Century.


10

5:205:205:205:20

About what percentage of the total checks written

in the U.S. are processed by the Fed?

• 25-30 percent

• 50-60 percent

• 100 percent




25-30 percent – the rest 25-30 percent – the rest of the checks written in of the checks written in the U.S. are processed the U.S. are processed by banks and private by banks and private

companies.companies.20

5:305:305:305:30

What is the MICR line?

Get extra 20 points if you know what MICR stands for.




The Magnetic Ink Character The Magnetic Ink Character Recognition (MICR) line contains Recognition (MICR) line contains information about the bank and information about the bank and account of the checking account account of the checking account

holder and is read by check holder and is read by check sorting equipment at the Fed.sorting equipment at the Fed.

30

5:405:405:405:40

According to the Check 21 Legislation, what can be used in the place of a check (as of Oct. 2004)?




A substitute checkA substitute check

A paper copy with A paper copy with MICR encoding that is MICR encoding that is a legal equivalent of a legal equivalent of

an original check.an original check.40

5:505:505:505:50

Name another payment method that

consumers can use besides cash or a check?



• Debit cardDebit card

• Direct paymentDirect payment

• Electronic PaymentsElectronic Payments

• Others….Others….


50

Bonus Bonus QuestionQuestionBonus Bonus QuestionQuestion B O N U S Q U E S T I O NB O N U S Q U E S T I O N

Congratulations! Congratulations! If you answer the If you answer the Bonus Bonus QuestionQuestion correctly, your correctly, your team receives team receives doubledouble the the

points assigned to this points assigned to this question.question.

TO THE BONUS QUESTION TO THE BONUS QUESTION

MultiQ ChoicesMultiQ ChoicesMultiQ ChoicesMultiQ Choices Currency:Currency:

The Later The Later YearsYears

Banking Banking Supervision Supervision

and and RegulationRegulation

Central Central Banking & Banking &

Risk Risk MitigationMitigation

““Cash” InCash” In The Fed: By The Fed: By the Numbersthe Numbers

20 20 20 20 20

40 40 40 40 40

60 60 60 60 60

80 80 80 80 80

100 100 100 100 100

FINAL QUESTIONFINAL QUESTIONFINAL QUESTIONFINAL QUESTIONFed Facts: Double RoundFed Facts: Double Round

1:101:101:101:10

What was the significance of the

National Banking Act of 1863?



National Bank notes were National Bank notes were issued to provide a issued to provide a

national currency and national currency and eliminate the issuance of eliminate the issuance of state and private notes.state and private notes.


20

1:201:201:201:20

Which famous Sioux Chief is pictured on historical U.S. Currency?

What is the significance of this note?



Chief Running AntelopeChief Running Antelope – – He was shown in a Pawnee headdress He was shown in a Pawnee headdress

(instead of a Sioux headdress).(instead of a Sioux headdress).

This change was meant to increase the This change was meant to increase the artistic impact of the note, but it artistic impact of the note, but it

escalated an existing conflict between escalated an existing conflict between the two tribes.the two tribes.


1:301:301:301:30

Which historical woman has her

portrait pictured on U.S. currency?


1:30 Answer1:30 Answer1:30 Answer1:30 AnswerT h e c o r r e c t a n s w e r i s …T h e c o r r e c t a n s w e r i s …

Martha Washington Martha Washington


1:401:401:401:40

What is significant about the following bill?



After the “Spencer Clark” bill After the “Spencer Clark” bill Congress passed legislation that Congress passed legislation that stated in order for an individual stated in order for an individual to have their portrait on a bill, to have their portrait on a bill,

they must be deceased.they must be deceased.


1:501:501:501:50

What is the largest denomination of

currency currently in circulation?



$100$100($500, $1000, $5000, and ($500, $1000, $5000, and

$10,000 were discontinued in $10,000 were discontinued in 1946 due to high amount of 1946 due to high amount of counterfeiting of the larger counterfeiting of the larger

denominations)denominations)100


2:102:102:102:10

Name 4 of the 6 factors on which

banks are rated by bank examiners.

(Hint: Think of a desert animal.)



• CCapitalapital• AAsset Qualitysset Quality• MManagementanagement• EEarningsarnings• LLiquidityiquidity• SSensitivity to riskensitivity to risk 20


2:202:202:202:20

Name two types of bank exams

conducted by Fed examiners?



• Safety and Soundness (Financial Exam) Safety and Soundness (Financial Exam)

• Consumer Compliance (Fair Treatment)Consumer Compliance (Fair Treatment)

• CRA (Community Reinvestment Act)CRA (Community Reinvestment Act)

• IT (Information Technology)IT (Information Technology)

• FiduciaryFiduciary

• InternationalInternational

• Bank Holding Company InspectionBank Holding Company Inspection 40CLICK TO PLAY AGAINCLICK TO PLAY AGAIN

2:302:302:302:30

The Community Reinvestment Act

does what?



Mandates banks Mandates banks reinvest in the reinvest in the

various communities various communities they serve.they serve.


2:402:402:402:40

Does the Fed regulate all banks?



No. The Fed regulates state No. The Fed regulates state member banks, financial member banks, financial holding companies and holding companies and international financial international financial holding companies. holding companies.


2:502:502:502:50

What is meant by a bank’s

“capital”?



Capital is the bank’s Capital is the bank’s assets minus its assets minus its

liabilities.liabilities.


3:103:103:103:10

What kind of accounts do financial institutions

hold at Federal Reserve Banks?



Reserve AccountsReserve Accounts


3:203:203:203:20

Name one difference between the Federal

Reserve and a commercial bank?



Their clientsTheir clientsCommercial banks: individuals & businessesCommercial banks: individuals & businesses

The Fed: banks & the federal governmentThe Fed: banks & the federal government


3:303:303:303:30

Which state houses two Federal Reserve District headquarter

offices?



Missouri.Missouri. Kansas City and St. LouisKansas City and St. Louis


3:403:403:403:40

What does it mean to say that financial institutions keep

money “on reserve”?



Financial institutions are Financial institutions are required to keep a minimum required to keep a minimum amount of money (calculated amount of money (calculated

as a share of their total as a share of their total assets) in their reserve assets) in their reserve

account at the Fed.account at the Fed. 80CLICK TO PLAY AGAINCLICK TO PLAY AGAIN

3:503:503:503:50

Why does the Fed require that

commercial banks have reserve accounts?



Keeping some money “on Keeping some money “on reserve” in these accounts helps reserve” in these accounts helps protect the banking system so protect the banking system so that when depositors come to that when depositors come to

the bank to retrieve cash, it will the bank to retrieve cash, it will be available for them.be available for them.


4:104:104:104:10

Whose money is stored in Fed vaults?



• Financial institutions,Financial institutions,

• New currency from the BEP New currency from the BEP or coins from the Mint,or coins from the Mint,

• In New York—the gold of In New York—the gold of other nations.other nations.


4:204:204:204:20

Name two reasons that cash may be

shredded at the Fed.



• It is out of circulation. It is out of circulation.

• It is worn out.It is worn out.

• It is torn.It is torn.

• It is written on.It is written on.40


4:304:304:304:30

Name all the denominations of currency that are

currently in circulation



$1, $2, $5, $10, $1, $2, $5, $10,

$20, $50, $100$20, $50, $100


4:404:404:404:40

About how many notes are processed daily in

San Francisco?• 6 million

• 10 million

• 18 million



6 million6 million


4:504:504:504:50

About what percentage of notes are shredded in the

high-speed machines? • 6 percent

• 18 percent

• 36 percent



18 percent18 percent


5:105:105:105:10

How many offices (including head

offices, branches, and cash processing

centers) are in the 12th District?



66

(San Francisco, Los (San Francisco, Los Angeles, Salt Lake City, Angeles, Salt Lake City,

Portland, Seattle, Phoenix)Portland, Seattle, Phoenix)


5:205:205:205:20

What is the current Fed Funds

target rate?



3.0 %3.0 %


5:305:305:305:30

In what year was the Federal Reserve

established?



19131913


5:405:405:405:40

How many Districts are in the Federal Reserve System?

$10 POINT BONUS: Why are they so different in size?



1212

BONUS: The District lines BONUS: The District lines were drawn in 1913 based on were drawn in 1913 based on

population at the time.population at the time.80


5:505:505:505:50

What’s the average life span of a $1 bill?



18 - 22 months18 - 22 months


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RETURN TO GAME BOARD

• Team members may consult on the Team members may consult on the final question.final question.

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Last Last QuestioQuestion n

Last Last QuestioQuestion n

Name the current President of the

Federal Reserve Bank of San Francisco


T H E F I N A L Q U E S T I O NT H E F I N A L Q U E S T I O N

Last Last Answer Answer Last Last Answer Answer

CLICK TO END THE GAMECLICK TO END THE GAME

Dr. Janet YellenDr. Janet YellenDr. Janet YellenDr. Janet Yellen

T h e c o r r e c t a n s w e r i s …T h e c o r r e c t a n s w e r i s …

Questions?Questions?Contact your local

Public Information Department

San Francisco (415) 974-3230

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Portland (503) 221-6058

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Seattle (206) 322-3747

www.frbsf.org

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