Question 1

What type of nondeposit institution will buy and sell stocks and bonds on behalf of clients?

Accepted Answer

A)  Insurance companies 
B)  Pension and trust services 
C)  Finance companies 
D)  Pension funds 
E)  Securities investment dealers 
A)  Insurance companies 
B)  Pension and trust services 
C)  Finance companies 
D)  Pension funds 
E)  Securities investment dealers

Question 2

According to reports, what can the subprime crisis of 2008 be traced to?

Accepted Answer

A)  Overly relaxed credit standards 
B)  Home foreclosures 
C)  Defaults on credit payments 
D)  High unemployment levels 
E)  Prime mortgage rates 
A)  Overly relaxed credit standards 
B)  Home foreclosures 
C)  Defaults on credit payments 
D)  High unemployment levels 
E)  Prime mortgage rates

Question 3

Which of the following is NOT part of the M-2 money supply?

Accepted Answer

A)  Debit card account 
B)  Time deposits 
C)  Money market mutual funds 
D)  Savings account 
E)  Credit card account 
A)  Debit card account 
B)  Time deposits 
C)  Money market mutual funds 
D)  Savings account 
E)  Credit card account

Question 4

Why would a consumer utilize trust services offered by commercial banks?

Accepted Answer

Many commercial banks offer trust servic

Question 5

In order to save money on transactional costs, the U.S. Treasury is moving to electronic fund transfers for payments rather than issuing checks.

Accepted Answer

A) True 
 B)False

Question 6

As the government's bank, the Fed produces the nation's paper currency and lends money to the government.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following reasons is the primary motivator for a commercial bank to acquire new depositors?

Accepted Answer

A)  A new deposit account will make more funds available to pay the interest on other deposit accounts. 
B)  A new deposit account will make more funds available to pay the bank's employees. 
C)  A new deposit account will make more funds available to give out in loans. 
D)  A new deposit account will make more funds available to give out in dividends to its investors. 
E)  A new deposit account will make more funds available to facilitate brokerage transactions. 
A)  A new deposit account will make more funds available to pay the interest on other deposit accounts. 
B)  A new deposit account will make more funds available to pay the bank's employees. 
C)  A new deposit account will make more funds available to give out in loans. 
D)  A new deposit account will make more funds available to give out in dividends to its investors. 
E)  A new deposit account will make more funds available to facilitate brokerage transactions.

Question 8

Any object can serve as money if it is portable, divisible, durable, and stable.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following institutions simplifies financial settlements between buyers and sellers in different countries?

Accepted Answer

A)  The U.S. State Department 
B)  The International Monetary Fund 
C)  The World Bank 
D)  Commercial banks 
E)  The Internet 
A)  The U.S. State Department 
B)  The International Monetary Fund 
C)  The World Bank 
D)  Commercial banks 
E)  The Internet

Question 10

Which of the following financial institutions are considered to be owned by their depositors?

Accepted Answer

A)  Commercial banks and savings and loan associations 
B)  Savings and loan associations and mutual savings banks 
C)  Mutual savings banks and credit unions 
D)  Credit unions and pension funds 
E)  Pension funds and savings institutions 
A)  Commercial banks and savings and loan associations 
B)  Savings and loan associations and mutual savings banks 
C)  Mutual savings banks and credit unions 
D)  Credit unions and pension funds 
E)  Pension funds and savings institutions

Question 11

Which of the following affects the movement of funds between international buyers and sellers?

Accepted Answer

A)  Buyer's home country government trade policies 
B)  Seller's home country government policies 
C)  International government policies 
D)  Currency exchange rates 
E)  International payment process 
A)  Buyer's home country government trade policies 
B)  Seller's home country government policies 
C)  International government policies 
D)  Currency exchange rates 
E)  International payment process

Question 12

Which of the following indicates the relative strength of the currencies of two countries?

Accepted Answer

A)  Trade rate 
B)  Exchange rate 
C)  Trade balance 
D)  Relative gross national products 
E)  International loan rate 
A)  Trade rate 
B)  Exchange rate 
C)  Trade balance 
D)  Relative gross national products 
E)  International loan rate

Question 13

The reason why a savings account is not considered a component of the M-1 money supply is that it bears interest.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following BEST describes two of the three primary functions of the Federal Reserve System?

Accepted Answer

A)  Developing new financial markets and aiding banks in conducting their business 
B)  Aiding banks in conducting business and managing the U.S. money supply and interest rates 
C)  Managing the U.S. money supply and interest rates and monitoring interbank relationships 
D)  Monitoring interbank relationships and acting as a bank for the federal government 
E)  Acting as a bank for the federal government and developing new financial markets 
A)  Developing new financial markets and aiding banks in conducting their business 
B)  Aiding banks in conducting business and managing the U.S. money supply and interest rates 
C)  Managing the U.S. money supply and interest rates and monitoring interbank relationships 
D)  Monitoring interbank relationships and acting as a bank for the federal government 
E)  Acting as a bank for the federal government and developing new financial markets

Question 15

What measure of the money supply is most often used by businesses and governments for economic planning?

Accepted Answer

A)  M-2 
B)  Currency 
C)  Demand deposits 
D)  Liquidity 
E)  M-1 
A)  M-2 
B)  Currency 
C)  Demand deposits 
D)  Liquidity 
E)  M-1

Question 16

Like most of the federal government, the governors of the Federal Reserve System are democratically elected by the citizens of the United States.

Accepted Answer

A) True 
 B)False

Question 17

An example of a point-of-sale (POS)terminal is making a payment at the grocery store and having the system transfer funds from your account to the store's account.

Accepted Answer

A) True 
 B)False

Question 18

How does the Fed's monetary policy influence banks' willingness to loan money?

Accepted Answer

Monetary policy is the management of the

Question 19

In international payments, equal money inflows and outflows can result in no money being transferred between countries.

Accepted Answer

A) True 
 B)False

Question 20

There is discussion of a bill raising insurance premiums on bank deposits. Why would these premiums need to be raised?

Accepted Answer

The Federal Deposit Insurance Corporatio

What type of nondeposit institution will buy and sell stocks and bonds on behalf of clients?

According to reports, what can the subprime crisis of 2008 be traced to?

Which of the following is NOT part of the M-2 money supply?

Why would a consumer utilize trust services offered by commercial banks?

In order to save money on transactional costs, the U.S. Treasury is moving to electronic fund transfers for payments rather than issuing checks.

As the government's bank, the Fed produces the nation's paper currency and lends money to the government.

Which of the following reasons is the primary motivator for a commercial bank to acquire new depositors?

Any object can serve as money if it is portable, divisible, durable, and stable.

Which of the following institutions simplifies financial settlements between buyers and sellers in different countries?

Which of the following financial institutions are considered to be owned by their depositors?

Which of the following affects the movement of funds between international buyers and sellers?

Which of the following indicates the relative strength of the currencies of two countries?

The reason why a savings account is not considered a component of the M-1 money supply is that it bears interest.

Which of the following BEST describes two of the three primary functions of the Federal Reserve System?

What measure of the money supply is most often used by businesses and governments for economic planning?

Like most of the federal government, the governors of the Federal Reserve System are democratically elected by the citizens of the United States.

An example of a point-of-sale (POS)terminal is making a payment at the grocery store and having the system transfer funds from your account to the store's account.

How does the Fed's monetary policy influence banks' willingness to loan money?

In international payments, equal money inflows and outflows can result in no money being transferred between countries.

There is discussion of a bill raising insurance premiums on bank deposits. Why would these premiums need to be raised?

The U.S. Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

The Role of Accountants and Accounting Information

Managing Business Finances

Filters

Exam 16: Understanding Money and the Role of Banking

What type of nondeposit institution will buy and sell stocks and bonds on behalf of clients?

According to reports, what can the subprime crisis of 2008 be traced to?

Which of the following is NOT part of the M-2 money supply?

Why would a consumer utilize trust services offered by commercial banks?

In order to save money on transactional costs, the U.S. Treasury is moving to electronic fund transfers for payments rather than issuing checks.

As the government's bank, the Fed produces the nation's paper currency and lends money to the government.

Which of the following reasons is the primary motivator for a commercial bank to acquire new depositors?

Any object can serve as money if it is portable, divisible, durable, and stable.

Which of the following institutions simplifies financial settlements between buyers and sellers in different countries?

Which of the following financial institutions are considered to be owned by their depositors?

Which of the following affects the movement of funds between international buyers and sellers?

Which of the following indicates the relative strength of the currencies of two countries?

The reason why a savings account is not considered a component of the M-1 money supply is that it bears interest.

Which of the following BEST describes two of the three primary functions of the Federal Reserve System?

What measure of the money supply is most often used by businesses and governments for economic planning?

Like most of the federal government, the governors of the Federal Reserve System are democratically elected by the citizens of the United States.

An example of a point-of-sale (POS)terminal is making a payment at the grocery store and having the system transfer funds from your account to the store's account.

How does the Fed's monetary policy influence banks' willingness to loan money?

In international payments, equal money inflows and outflows can result in no money being transferred between countries.

There is discussion of a bill raising insurance premiums on bank deposits. Why would these premiums need to be raised?

The U.S. Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

The Role of Accountants and Accounting Information

Managing Business Finances

Filters