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66. The correct answer is (E). Starting in 1763, the British Parliament passed a series of acts designed to
raise revenues in the colonies. It made provision for stricter enforcement of existing revenue devices
such as the Molasses Act, which was widely circumvented by smugglers, and passed new revenue-
raising devices such as the Sugar Act and the Stamp Act. The Quartering Act was not a revenue-raising
measure so much as a cost-cutting plan. It provided that where barracks were inadequate to house
British troops, the troops were to be quartered in public hostelries or even private buildings and the cost
was to be borne by the colonists. In addition, the colonists were required to provide food and other items
to the troops. Since this policy imposed yet another cost on them, what to Great Britain seemed a cost-
cutting measure was to the colonists another form of taxation.
67. The correct answer is (B). Article 2, Section 2, Clause 2 of the Constitution provides that the presi-
dent “shall have power, by and with the advice and consent of the Senate, to make treaties, provided
two-thirds of the Senators present concur.”
68. The correct answer is (C). The Federal Reserve System, established in 1913 and strengthened dur-
ing the New Deal, is the central banking authority in the United States. It includes twelve Federal
Reserve Banks that are often described as “bankers’ banks.” That is because the customers of the
Federal Reserve Banks are not people or businesses but banks. The system is under the control of a
Board of Governors, each member of which is appointed for a 14-year term by the President with the
consent of the Senate. Thus, the Fed, as it is known, has a good deal of independence, and it has
several, powers that allow it to exercise control over the economy. One of these powers is the author-
ity to set the discount rate. This is the rate at which the Federal Reserve Banks lend money to other
banks. If the Fed raises the discount rate, then banks raise the interest rate they charge on loans to
customers. And conversely, if the Fed lowers the discount rate, then banks lower the interest rate they
charge on loans to customers. In this way, the Fed makes borrowing more difficult or easier and can
discourage or encourage economic activity.