Question 1

The rate of interest charged by the Federal Reserve is called the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 2

To decrease the money supply,the Federal Reserve sells U.S.government bonds in open-market operations.

Accepted Answer

A) True 
 B)False

Question 3

The __________ primarily provides for the financing of economic development projects throughout the world.

Accepted Answer

A)  International Monetary Fund
B)  International Reserve Bank
C)  World Bank
D)  World Development AuthorityE) B) and D)
F) A) and D)

Question 4

The banking panic of 1907 and the resulting cash shortage led to the formation of the:

Accepted Answer

A)  Federal Reserve System.
B)  Comptroller of the Currency.
C)  gold standard for currency,and the establishment of a gold repository at Fort Knox.
D)  FDIC.E) None of the above
F) A) and B)

Question 5

The Fed commonly buys or sells U.S.government securities to regulate the money supply.

Accepted Answer

A) True 
 B)False

Question 6

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

Question 7

Persons with deposits less than $100,000 in banks,savings and loans,and credit unions run the risk of losing their money in an economic downturn.

Accepted Answer

A) True 
 B)False

Question 8

When the Fed increases the discount rate,banks:

Accepted Answer

A)  must purchase more government securities.
B)  must pay a higher rate when they borrow from the Fed.
C)  will lower the rate they charge to borrowers.
D)  must hold a greater amount of funds in reserve against deposits.E) A) and C)
F) None of the above

Question 9

A direct payment is a pre-authorized electronic payment.

Accepted Answer

A) True 
 B)False

Question 10

Although there are many features about online banking that customers do not care for,they are seldom concerned with the security due to continued assurances by the banking industry.

Accepted Answer

A) True 
 B)False

Question 11

Identify and discuss the tools and products that electronically transfer funds.

Accepted Answer

In an electronic funds transfer (EFT)sys...

Question 12

Which of the following is not a favorable characteristic of money?

Accepted Answer

A)  Barterability
B)  Divisibility
C)  Portability
D)  DurabilityE) B) and D)
F) B) and C)

Question 13

The International Monetary Fund does not lend money.

Accepted Answer

A) True 
 B)False

Question 14

When Mrs.Sweet exchanges her famous chocolate chip cookies for the lawn care services of her neighbor,she engages in a barter transaction.

Accepted Answer

A) True 
 B)False

Question 15

Chad travels extensively for his company.He stays at hotels that provide him with a(n) ____________ that is imbedded with his personal information as well as a code to unlock his hotel room.

Accepted Answer

A)  smart card
B)  RFID tag
C)  credit card
D)  automatic keyE) None of the above
F) A) and B)

Question 16

As a relatively poor nation,Liberia wants to obtain funds for a project to improve the availability of water and electricity.Liberia should contact the International Monetary Fund.

Accepted Answer

A) True 
 B)False

Question 17

The board of governors of the Federal Reserve System determines:

Accepted Answer

A)  exchange rates.
B)  U.S.monetary policy.
C)  and monitors the inflows and outflows of gold reserves to ensure a stable money supply.
D)  how much money the U.S.will loan to foreign governments.E) B) and C)
F) A) and D)

Question 18

Thomas Jefferson proposed the establishment of the first central bank in the United States.

Accepted Answer

A) True 
 B)False

Question 19

How did banks contribute to the crisis of 2008-2010?

Accepted Answer

A)  They began to offer investment products other than demand and time deposits.
B)  They provided loans higher than the discount rate.
C)  They made risky loans and then created mortgage backed securities from the assets they held.
D)  They refused to sell anything other than fixed-rate mortgages.E) All of the above
F) B) and D)

Question 20

Credit cards represent the trend toward an electronic funds transfer system.

Accepted Answer

A) True 
 B)False

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

The banking panic of 1907 and the resulting cash shortage led to the formation of the:

Correct AnswerverifiedShow Answer

Which of the following is not a favorable characteristic of money?

Correct AnswerverifiedShow Answer

The __________ primarily provides for the financing of economic development projects throughout the world.

Correct AnswerverifiedShow Answer

How did banks contribute to the crisis of 2008-2010?

Correct AnswerverifiedShow Answer

Although there are many features about online banking that customers do not care for,they are seldom concerned with the security due to continued assurances by the banking industry.

Correct AnswerverifiedShow Answer

To decrease the money supply,the Federal Reserve sells U.S.government bonds in open-market operations.

Correct AnswerverifiedShow Answer

Persons with deposits less than $100,000 in banks,savings and loans,and credit unions run the risk of losing their money in an economic downturn.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

As a relatively poor nation,Liberia wants to obtain funds for a project to improve the availability of water and electricity.Liberia should contact the International Monetary Fund.

Correct AnswerverifiedShow Answer

When Mrs.Sweet exchanges her famous chocolate chip cookies for the lawn care services of her neighbor,she engages in a barter transaction.

Correct AnswerverifiedShow Answer

Thomas Jefferson proposed the establishment of the first central bank in the United States.

Correct AnswerverifiedShow Answer

The Fed commonly buys or sells U.S.government securities to regulate the money supply.

Correct AnswerverifiedShow Answer

The board of governors of the Federal Reserve System determines:

Correct AnswerverifiedShow Answer

Chad travels extensively for his company.He stays at hotels that provide him with a(n) ____________ that is imbedded with his personal information as well as a code to unlock his hotel room.

Correct AnswerverifiedShow Answer

When the Fed increases the discount rate,banks:

Correct AnswerverifiedShow Answer

Credit cards represent the trend toward an electronic funds transfer system.

Correct AnswerverifiedShow Answer

Identify and discuss the tools and products that electronically transfer funds.

Correct AnswerverifiedIn an electronic funds transfer (EFT)sys...View AnswerShow Answer

A direct payment is a pre-authorized electronic payment.

Correct AnswerverifiedShow Answer

The International Monetary Fund does not lend money.

Correct AnswerverifiedShow Answer

The rate of interest charged by the Federal Reserve is called the federal funds rate.

Correct AnswerverifiedShow Answer

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In an electronic funds transfer (EFT)sys...
View Answer

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