Question 1

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

Accepted Answer

The World Bank and the International Mon...

Question 2

The ________ represents one of the Fed's most powerful monetary policy tools.

Accepted Answer

A)   reserve requirement
B)   discount rate
C)   margin requirement
D)   working capital requirementE) A) and B)
F) B) and D)

Question 3

Aaron has played supporting roles in a number of movies and is passionate about his craft to the point where he created a home theatre inside his house. He has subscriptions to Netflix, Hulu, and all the premium cable channels. For added convenience, he has set up direct payment to these companies. This means when his statement arrives each month, he will get online and tell his bank how much to pay these vendors.

Accepted Answer

A) True 
 B)False

Question 4

When traveling in other countries, tourists can use their MasterCard or Visa bankcards to obtain foreign currencies at ATMs.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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.E) A) and B)
F) C) and D)

Question 7

Ryan works at a community college and the college requires all employees to contribute to a pension fund. At this time, he is not too worried about the safety of this contribution because

Accepted Answer

A)   the pensions fund's investments are always backed by the full faith and credit of the U.S. government.
B)   pension funds are provided by nonbanks so they are not going to take this money and lend it to others.
C)   he is considered a state employee, and as such, he is protected from this fund going bankrupt.
D)   pension funds usually make conservative investments.E) B) and C)
F) All of the above

Question 8

The strength of the U.S. dollar relative to other currencies depends mainly on

Accepted Answer

A)   the rate of inflation in the United States.
B)   the performance of the U.S. economy relative to other economies.
C)   how much gold backs the money supply.
D)   exchange rate decisions made by the International Monetary Fund.E) A) and B)
F) B) and C)

Question 9

Yesterday it was reported that the U.S. was clearly experiencing an economic downturn. A strategy the Fed may enact if the nation is facing recession is to buy government securities in open-market operations.

Accepted Answer

A) True 
 B)False

Question 10

The International Monetary Fund does not lend money.

Accepted Answer

A) True 
 B)False

Question 11

A savings account is also known as a time deposit.

Accepted Answer

A) True 
 B)False

Question 12

Bryan searched for a new bank prior to filling out his direct deposit form at his new employer. He noted that 2-4-7 Bank offered higher interest rates on savings accounts and money market accounts; and it offered other amenities such as online banking and funds transfer that many traditional banks offer. What is the most logical reason that 2-4-7 Bank can compete for customers by offering higher interest rates?

Accepted Answer

A)   The bank probably cannot compete this way, for long. In order to build its market share, it is offering this as a one-time promotion.
B)   Its bank reserve requirement is less, due to the fact that the assets it is holding are not as substantial as bigger, traditional banks.
C)   The bank has no buildings and locations. Due to low overhead, it is able to share the savings it realizes with its customers.
D)   The bank pays its employees less than other banks.E) B) and C)
F) B) and D)

Question 13

Which of the following statements most accurately represents the history of U.S. banking?

Accepted Answer

A)   Although many technological changes have occurred, and banks have grown tremendously in size, the basic structure of banking in the United States has survived since the Revolutionary War.
B)   A major trend in U.S. banking was a move from federal control during the 1800s and early 1900s to a system now controlled by individual states.
C)   Although the early history of banking in the United States was very chaotic, the establishment of the Fed stabilized the banking system.
D)   The U.S. banking system has experienced a great deal of change and instability throughout its history.E) B) and C)
F) A) and D)

Question 14

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 15

Rob works as a loan officer for a major U.S. commercial bank, specializing in international loans. When considering loans to governments and businesses in other nations, Rob

Accepted Answer

A)   must be aware of federal limits on the total amount of U.S. funds his bank can lend to foreign borrowers.
B)   can only make loans if his bank has funds in excess of those sought by American firms.
C)   is likely to approve loans to foreign borrowers if the return is high enough to justify the risk.
D)   must be careful to get approval from the International Monetary Fund.E) None of the above
F) A) and D)

Question 16

Discuss the methods the Fed uses to enact monetary policy and provide an explanation of the effects these methods have on the supply of money.

Accepted Answer

The Federal Reserve System has three bas...

Question 17

A demand deposit is the technical name for a checking account.

Accepted Answer

A) True 
 B)False

Question 18

Bigbux Bank currently has deposits of $300 million. If the Fed establishes a reserve requirement of 12 percent, Bigbux must hold reserves of ________ against its deposits.

Accepted Answer

A)   $24 million
B)   $36 million
C)   $72 million
D)   $144 millionE) None of the above
F) A) and B)

Question 19

Smart cards contain a microprocessor chip that stores information about the user, such as driver's license data and bank balance.

Accepted Answer

A) True 
 B)False

Question 20

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 depositE) None of the above
F) C) and D)

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

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

Correct Answer
verified

Discuss the methods the Fed uses to enact monetary policy and provide an explanation of the effects these methods have on the supply of money.

Correct Answer
verified
The Federal Reserve System has three bas...
View Answer

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

Correct Answer
verified

Which of the following statements most accurately represents the history of U.S. banking?

Correct Answer
verified

Yesterday it was reported that the U.S. was clearly experiencing an economic downturn. A strategy the Fed may enact if the nation is facing recession is to buy government securities in open-market operations.

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

Correct Answer
verified

A demand deposit is the technical name for a checking account.

Correct Answer
verified

Ryan works at a community college and the college requires all employees to contribute to a pension fund. At this time, he is not too worried about the safety of this contribution because

Correct Answer
verified

The strength of the U.S. dollar relative to other currencies depends mainly on

Correct Answer
verified

The ________ represents one of the Fed's most powerful monetary policy tools.

Correct Answer
verified

When traveling in other countries, tourists can use their MasterCard or Visa bankcards to obtain foreign currencies at ATMs.

Correct Answer
verified

A savings account is also known as a time deposit.

Correct Answer
verified

The International Monetary Fund does not lend money.

Correct Answer
verified

Correct Answer
verified

Bigbux Bank currently has deposits of $300 million. If the Fed establishes a reserve requirement of 12 percent, Bigbux must hold reserves of ________ against its deposits.

Correct Answer
verified

Rob works as a loan officer for a major U.S. commercial bank, specializing in international loans. When considering loans to governments and businesses in other nations, Rob

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

Smart cards contain a microprocessor chip that stores information about the user, such as driver's license data and bank balance.

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

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

Correct AnswerverifiedShow Answer

Discuss the methods the Fed uses to enact monetary policy and provide an explanation of the effects these methods have on the supply of money.

Correct AnswerverifiedThe Federal Reserve System has three bas...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements most accurately represents the history of U.S. banking?

Correct AnswerverifiedShow Answer

Yesterday it was reported that the U.S. was clearly experiencing an economic downturn. A strategy the Fed may enact if the nation is facing recession is to buy government securities in open-market operations.

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

Correct AnswerverifiedShow Answer

A demand deposit is the technical name for a checking account.

Correct AnswerverifiedShow Answer

Ryan works at a community college and the college requires all employees to contribute to a pension fund. At this time, he is not too worried about the safety of this contribution because

Correct AnswerverifiedShow Answer

The strength of the U.S. dollar relative to other currencies depends mainly on

Correct AnswerverifiedShow Answer

The ________ represents one of the Fed's most powerful monetary policy tools.

Correct AnswerverifiedShow Answer

When traveling in other countries, tourists can use their MasterCard or Visa bankcards to obtain foreign currencies at ATMs.

Correct AnswerverifiedShow Answer

A savings account is also known as a time deposit.

Correct AnswerverifiedShow Answer

The International Monetary Fund does not lend money.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Bigbux Bank currently has deposits of $300 million. If the Fed establishes a reserve requirement of 12 percent, Bigbux must hold reserves of ________ against its deposits.

Correct AnswerverifiedShow Answer

Rob works as a loan officer for a major U.S. commercial bank, specializing in international loans. When considering loans to governments and businesses in other nations, Rob

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

Smart cards contain a microprocessor chip that stores information about the user, such as driver's license data and bank balance.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Federal Reserve System has three bas...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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