Question 1

Federal Reserve notes are _____.

Accepted Answer

A) checks 
B) commodity money 
C) coins 
D) backed by gold 
E) fiat money 
A) checks 
B) commodity money 
C) coins 
D) backed by gold 
E) fiat money

Question 2

The law that established the Federal Reserve System is the _____.

Accepted Answer

A) Federal Reserve Act of 1913 
B) National Banking Act of 1863 
C) Banking Act of 1933 
D) National Banking Act of 1813 
E) Federal Reserve Act of 1963 
A) Federal Reserve Act of 1913 
B) National Banking Act of 1863 
C) Banking Act of 1933 
D) National Banking Act of 1813 
E) Federal Reserve Act of 1963

Question 3

Exchange is necessary in an economy if:

Accepted Answer

A) output is to be produced. 
B) output is to be consumed. 
C) individuals are self-sufficient. 
D) families are self-sufficient. 
E) labor is specialized. 
A) output is to be produced. 
B) output is to be consumed. 
C) individuals are self-sufficient. 
D) families are self-sufficient. 
E) labor is specialized.

Question 4

The United States has a dual banking system consisting of state banks and national banks.

Accepted Answer

A) True 
 B)False

Question 5

The Federal Open Market Committee was established to give the Fed the power to change reserve requirements.

Accepted Answer

A) True 
 B)False

Question 6

The most effective mechanism for reducing runs on banks is _____.

Accepted Answer

A) the discount rate 
B) deposit insurance 
C) the reserve requirement 
D) open-market operations 
E) the Federal Reserve note 
A) the discount rate 
B) deposit insurance 
C) the reserve requirement 
D) open-market operations 
E) the Federal Reserve note

Question 7

As the variety of goods and services increases,barter becomes:

Accepted Answer

A) easier because the chance of there being a double coincidence of wants increases. 
B) harder because the chance of there being a double coincidence of wants increases. 
C) easier because the chance of there being a double coincidence of wants decreases. 
D) harder because the chance of there being a double coincidence of wants decreases. 
E) easier because people have more options to choose from. 
A) easier because the chance of there being a double coincidence of wants increases. 
B) harder because the chance of there being a double coincidence of wants increases. 
C) easier because the chance of there being a double coincidence of wants decreases. 
D) harder because the chance of there being a double coincidence of wants decreases. 
E) easier because people have more options to choose from.

Question 8

During the Great Depression,the Federal Reserve Board:

Accepted Answer

A) prevented many bank failures. 
B) failed to act as a lender of last resort. 
C) failed to clear checks adequately. 
D) began operating as the government's bank. 
E) issued too many bank notes. 
A) prevented many bank failures. 
B) failed to act as a lender of last resort. 
C) failed to clear checks adequately. 
D) began operating as the government's bank. 
E) issued too many bank notes.

Question 9

Which of the following is a depository institution?

Accepted Answer

A) An insurance company 
B) A credit union 
C) A finance company 
D) A pension fund 
E) A stock market 
A) An insurance company 
B) A credit union 
C) A finance company 
D) A pension fund 
E) A stock market

Question 10

Identify the correct statement regarding a fractional reserve banking system.

Accepted Answer

A) Only a fraction of the banks in the system are allowed to create money. 
B) Only a fraction of the banks in the system have reserves. 
C) The claims outstanding against the bank are only a fraction of the bank's total reserves. 
D) Each bank must deposit a fraction of its reserves with the Federal Reserve Bank. 
E) Bank reserves represent only a fraction of bank deposits. 
A) Only a fraction of the banks in the system are allowed to create money. 
B) Only a fraction of the banks in the system have reserves. 
C) The claims outstanding against the bank are only a fraction of the bank's total reserves. 
D) Each bank must deposit a fraction of its reserves with the Federal Reserve Bank. 
E) Bank reserves represent only a fraction of bank deposits.

Question 11

Which of the following is not a thrift institution?

Accepted Answer

A) A savings and loan association 
B) A commercial bank 
C) A mutual savings bank 
D) An employee credit union 
E) A college credit union 
A) A savings and loan association 
B) A commercial bank 
C) A mutual savings bank 
D) An employee credit union 
E) A college credit union

Question 12

The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Federal Reserve the authority to establish a reserve requirement for all financial institutions.

Accepted Answer

A) True 
 B)False

Question 13

Monetary policy is:

Accepted Answer

A) controlled by the president,who appoints the members of the Board of Governors. 
B) controlled by the president,who appoints the members of the Open Market Committee. 
C) insulated from politics since the term of only two members of the Board of Governors expires during the tenure of any modern president of the U.S. 
D) insulated from politics because the Federal Reserve Board is the bankers' bank. 
E) controlled by the department of finance of the United States. 
A) controlled by the president,who appoints the members of the Board of Governors. 
B) controlled by the president,who appoints the members of the Open Market Committee. 
C) insulated from politics since the term of only two members of the Board of Governors expires during the tenure of any modern president of the U.S. 
D) insulated from politics because the Federal Reserve Board is the bankers' bank. 
E) controlled by the department of finance of the United States.

Question 14

A bank holding company is:

Accepted Answer

A) a conglomerate that owns a bank to service the other businesses it owns. 
B) a loose federation of private banks that holds assets in common. 
C) a corporation that owns one or more banks. 
D) a bank that is owned by the depositors. 
E) a subsidiary of a major corporation. 
A) a conglomerate that owns a bank to service the other businesses it owns. 
B) a loose federation of private banks that holds assets in common. 
C) a corporation that owns one or more banks. 
D) a bank that is owned by the depositors. 
E) a subsidiary of a major corporation.

Question 15

The earliest type of exchange involved _____.

Accepted Answer

A) coins 
B) barter 
C) commodity money 
D) fiduciary money 
E) fiat money 
A) coins 
B) barter 
C) commodity money 
D) fiduciary money 
E) fiat money

Question 16

The U.S.dollar is backed by gold.

Accepted Answer

A) True 
 B)False

Question 17

The Federal Deposit Insurance Corporation (FDIC)insures the total value of all deposits in banks that are members of the Fed.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is associated with the problem of hyperinflation?

Accepted Answer

A) Money is in short supply. 
B) The value of money rises dramatically. 
C) The government runs out of money. 
D) People look for alternatives to using money. 
E) People start to hold on to money for long periods of time. 
A) Money is in short supply. 
B) The value of money rises dramatically. 
C) The government runs out of money. 
D) People look for alternatives to using money. 
E) People start to hold on to money for long periods of time.

Question 19

Each member of the Board of Governors of the Fed serves:

Accepted Answer

A) a four-year term that begins at the same time as that of the newly elected president. 
B) a four-year term that does not coincide with the term of the current president. 
C) until a new president is elected. 
D) a fourteen-year term. 
E) a six-year term. 
A) a four-year term that begins at the same time as that of the newly elected president. 
B) a four-year term that does not coincide with the term of the current president. 
C) until a new president is elected. 
D) a fourteen-year term. 
E) a six-year term.

Question 20

Identify the correct statement about the Fed.

Accepted Answer

A) When the Federal Reserve System was established,all banks were required to become members. 
B) When the Federal Reserve System was established,only federally chartered banks were allowed to join. 
C) When the Federal Reserve System was established,only federally chartered banks were required to join. 
D) When the Federal Reserve System was established,most banks joined even though none were required to join. 
E) When the Federal Reserve System was established,membership was required for all banks in some states,but not in others. 
A) When the Federal Reserve System was established,all banks were required to become members. 
B) When the Federal Reserve System was established,only federally chartered banks were allowed to join. 
C) When the Federal Reserve System was established,only federally chartered banks were required to join. 
D) When the Federal Reserve System was established,most banks joined even though none were required to join. 
E) When the Federal Reserve System was established,membership was required for all banks in some states,but not in others.

Federal Reserve notes are _____.

The law that established the Federal Reserve System is the _____.

Exchange is necessary in an economy if:

The United States has a dual banking system consisting of state banks and national banks.

The Federal Open Market Committee was established to give the Fed the power to change reserve requirements.

The most effective mechanism for reducing runs on banks is _____.

As the variety of goods and services increases,barter becomes:

During the Great Depression,the Federal Reserve Board:

Which of the following is a depository institution?

Identify the correct statement regarding a fractional reserve banking system.

Which of the following is not a thrift institution?

The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Federal Reserve the authority to establish a reserve requirement for all financial institutions.

Monetary policy is:

A bank holding company is:

The earliest type of exchange involved _____.

The U.S.dollar is backed by gold.

The Federal Deposit Insurance Corporation (FDIC)insures the total value of all deposits in banks that are members of the Fed.

Which of the following is associated with the problem of hyperinflation?

Each member of the Board of Governors of the Fed serves:

Identify the correct statement about the Fed.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 13: Money and the Financial System

Federal Reserve notes are _____.

The law that established the Federal Reserve System is the _____.

Exchange is necessary in an economy if:

The United States has a dual banking system consisting of state banks and national banks.

The Federal Open Market Committee was established to give the Fed the power to change reserve requirements.

The most effective mechanism for reducing runs on banks is _____.

As the variety of goods and services increases,barter becomes:

During the Great Depression,the Federal Reserve Board:

Which of the following is a depository institution?

Identify the correct statement regarding a fractional reserve banking system.

Which of the following is not a thrift institution?

The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Federal Reserve the authority to establish a reserve requirement for all financial institutions.

Monetary policy is:

A bank holding company is:

The earliest type of exchange involved _____.

The U.S.dollar is backed by gold.

The Federal Deposit Insurance Corporation (FDIC)insures the total value of all deposits in banks that are members of the Fed.

Which of the following is associated with the problem of hyperinflation?

Each member of the Board of Governors of the Fed serves:

Identify the correct statement about the Fed.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters