Question 1

The Federal Reserve represents a "bankers' bank" because

Accepted Answer

A)   it was created as a central clearinghouse for the transactions of the largest banks.
B)   commercial banks compete with the Fed for business customers.
C)   it lobbies Congress in support of banking reform legislation.
D)   it holds the deposits of commercial banks and makes loans to banks that need additional funds.

Question 2

Compare and contrast the functions of the World Bank and the International Monetary Fund.

Accepted Answer

The World Bank and the International Mon...

Question 3

As a response to a rise in savings and loan failures, the federal government no longer insures holders of accounts in savings and loan associations.

Accepted Answer

A) True 
 B)False

Question 4

Most countries restrict the flow of money in and out of their borders.

Accepted Answer

A) True 
 B)False

Question 5

Leah trades some of her homegrown peppers to her neighbor, Charlie, for some tomatoes fresh from his garden. This type of trade represents an example of

Accepted Answer

A)   barter.
B)   e-commerce.
C)   direct exchange.
D)   tax avoidance.

Question 6

The ________ category of money supply includes money that is quickly and easily accessed.

Accepted Answer

A)   e-cash
B)   M-3
C)   M-2
D)   M-1

Question 7

When a commercial bank fails, depositors lose all of their money.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following helps to provide for the smooth flow of money between nations?

Accepted Answer

A)   International Monetary Fund
B)   Foreign Exchange Bank
C)   World Bank
D)   International Exchange Center

Question 9

Bank crises tend to correlate with economic recessions.

Accepted Answer

A) True 
 B)False

Question 10

The strength of the U.S. money system rests on the silver content of the coins.

Accepted Answer

A) True 
 B)False

Question 11

Commercial banks operate as nonprofit institutions.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following represents the technical name for a checking account?

Accepted Answer

A)   free deposit
B)   variable annuity
C)   demand deposit
D)   certificate of deposit

Question 13

Payroll debit cards are cheaper for employers because your paycheck is loaded on a debit card instead of cutting a check. This is convenient for customers who do not qualify for a regular debit or credit card, because they can use it to pay bills, do online purchasing, and even get cash from an ATM.

Accepted Answer

A) True 
 B)False

Question 14

The ________ insures holders of accounts in savings and loan associations.

Accepted Answer

A)   Savings Association Insurance Fund
B)   Federal Savings Protection Agency
C)   Savings and Loan Assurance Corporation
D)   National Savings Deposit Insurance Cooperative

Question 15

After the bank failures that occurred during the Great Depression of the 1930s, the U.S. government formed three organizations: the Federal Deposit Insurance Corporation (FDIC); the Savings Association Insurance Fund (SAIF); and National Credit Union Administration (NCUA) to restore people's confidence and insure deposits.

Accepted Answer

A) True 
 B)False

Question 16

When the value of the U.S. dollar increases relative to other currencies,

Accepted Answer

A)   the rate of inflation increases.
B)   the size of the national debt decreases.
C)   foreign goods become less expensive to U.S. consumers.
D)   U.S. goods become less expensive to foreign buyers.

Question 17

A savings account represents a demand deposit.

Accepted Answer

A) True 
 B)False

Question 18

The Federal Reserve is the bankers' bank.

Accepted Answer

A) True 
 B)False

Question 19

As a response to the bank failures of the ________, a system of federal deposit insurance was established to strengthen the banking system.

Accepted Answer

A)   Civil War
B)   wildcat banking crisis of the 1880s
C)   Great Depression
D)   banking crisis of the early 1980s

Question 20

Anthony would like to have his brokerage firm handle more of his financial needs because he has been pleased with the service provided when he bought and sold stocks and bonds. If he explores the services offered by such firms in more depth, he will find that

Accepted Answer

A)   federal laws prohibit brokerage firms from competing with banks, savings and loan associations, and credit unions.
B)   although brokerage firms can offer some banking services, they typically are less efficient at providing them than banks, because they specialize in buying and selling securities.
C)   brokerage firms are becoming serious competitors for banks and other depository institutions by offering high-yield combination savings and checking accounts and money market accounts, as well as certain types of loans.
D)   although brokerage firms offer attractive banking services, federal law prohibits individual investors from holding both a checking account and a securities account with the same firm.

Exam 20: Money, Financial Institutions, and the Federal Reserve

As a response to a rise in savings and loan failures, the federal government no longer insures holders of accounts in savings and loan associations.

Correct Answer
verified

When the value of the U.S. dollar increases relative to other currencies,

Correct Answer
verified

Bank crises tend to correlate with economic recessions.

Correct Answer
verified

Which of the following helps to provide for the smooth flow of money between nations?

Correct Answer
verified

As a response to the bank failures of the ________, a system of federal deposit insurance was established to strengthen the banking system.

Correct Answer
verified

The Federal Reserve represents a "bankers' bank" because

Correct Answer
verified

The strength of the U.S. money system rests on the silver content of the coins.

Correct Answer
verified

Payroll debit cards are cheaper for employers because your paycheck is loaded on a debit card instead of cutting a check. This is convenient for customers who do not qualify for a regular debit or credit card, because they can use it to pay bills, do online purchasing, and even get cash from an ATM.

Correct Answer
verified

Commercial banks operate as nonprofit institutions.

Correct Answer
verified

Anthony would like to have his brokerage firm handle more of his financial needs because he has been pleased with the service provided when he bought and sold stocks and bonds. If he explores the services offered by such firms in more depth, he will find that

Correct Answer
verified

The Federal Reserve is the bankers' bank.

Correct Answer
verified

The ________ insures holders of accounts in savings and loan associations.

Correct Answer
verified

Leah trades some of her homegrown peppers to her neighbor, Charlie, for some tomatoes fresh from his garden. This type of trade represents an example of

Correct Answer
verified

A savings account represents a demand deposit.

Correct Answer
verified

Correct Answer
verified

Most countries restrict the flow of money in and out of their borders.

Correct Answer
verified

Compare and contrast the functions of the World Bank and the International Monetary Fund.

Correct Answer
verified
The World Bank and the International Mon...
View Answer

The ________ category of money supply includes money that is quickly and easily accessed.

Correct Answer
verified

When a commercial bank fails, depositors lose all of their money.

Correct Answer
verified

Which of the following represents the technical name for a checking account?

Correct Answer
verified

Exam 20: Money, Financial Institutions, and the Federal Reserve

As a response to a rise in savings and loan failures, the federal government no longer insures holders of accounts in savings and loan associations.

Correct AnswerverifiedShow Answer

When the value of the U.S. dollar increases relative to other currencies,

Correct AnswerverifiedShow Answer

Bank crises tend to correlate with economic recessions.

Correct AnswerverifiedShow Answer

Which of the following helps to provide for the smooth flow of money between nations?

Correct AnswerverifiedShow Answer

As a response to the bank failures of the ________, a system of federal deposit insurance was established to strengthen the banking system.

Correct AnswerverifiedShow Answer

The Federal Reserve represents a "bankers' bank" because

Correct AnswerverifiedShow Answer

The strength of the U.S. money system rests on the silver content of the coins.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Commercial banks operate as nonprofit institutions.

Correct AnswerverifiedShow Answer

Anthony would like to have his brokerage firm handle more of his financial needs because he has been pleased with the service provided when he bought and sold stocks and bonds. If he explores the services offered by such firms in more depth, he will find that

Correct AnswerverifiedShow Answer

The Federal Reserve is the bankers' bank.

Correct AnswerverifiedShow Answer

The ________ insures holders of accounts in savings and loan associations.

Correct AnswerverifiedShow Answer

Leah trades some of her homegrown peppers to her neighbor, Charlie, for some tomatoes fresh from his garden. This type of trade represents an example of

Correct AnswerverifiedShow Answer

A savings account represents a demand deposit.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Most countries restrict the flow of money in and out of their borders.

Correct AnswerverifiedShow Answer

Compare and contrast the functions of the World Bank and the International Monetary Fund.

Correct AnswerverifiedThe World Bank and the International Mon...View AnswerShow Answer

The ________ category of money supply includes money that is quickly and easily accessed.

Correct AnswerverifiedShow Answer

When a commercial bank fails, depositors lose all of their money.

Correct AnswerverifiedShow Answer

Which of the following represents the technical name for a checking account?

Correct AnswerverifiedShow Answer

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The World Bank and the International Mon...
View Answer

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verified

Correct Answer
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Correct Answer
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