Question 1

The 12 Federal Reserve Banks are governmentally owned but privately controlled.

Accepted Answer

A) True 
 B)False

Question 2

"Near monies" are included in

Accepted Answer

A) both M1 and M2. 
B) M2 only. 
C) M1 only. 
D) neither M1 nor M2. 
A) both M1 and M2. 
B) M2 only. 
C) M1 only. 
D) neither M1 nor M2.

Question 3

The following financial institutions traditionally accept deposits from savers, except

Accepted Answer

A) thrifts. 
B) mutual fund companies. 
C) investment banks. 
D) pension funds. 
A) thrifts. 
B) mutual fund companies. 
C) investment banks. 
D) pension funds.

Question 4

The 12 Federal Reserve Banks can best be characterized as

Accepted Answer

A) central banks, banker's banks, and quasi-public banks. 
B) regional banks, public banks, and member banks. 
C) investment banks, banker's banks, and public banks. 
D) national banks, quasi-public banks, and investment banks. 
A) central banks, banker's banks, and quasi-public banks. 
B) regional banks, public banks, and member banks. 
C) investment banks, banker's banks, and public banks. 
D) national banks, quasi-public banks, and investment banks.

Question 5

Currency held in the vault of First National Bank is

Accepted Answer

A) counted as part of M1. 
B) counted as part of M2 but not M1. 
C) only counted as part of M1 if it was deposited into a checking account. 
D) not counted as part of the money supply. 
A) counted as part of M1. 
B) counted as part of M2 but not M1. 
C) only counted as part of M1 if it was deposited into a checking account. 
D) not counted as part of the money supply.

Question 6

The government bailout of large institutions creates the problem of moral hazard, which means that these large firms will

Accepted Answer

A) not be able to pay back the bailout money. 
B) have an incentive to make highly risky investments. 
C) now have to play it safer to reduce their risks. 
D) be limited in terms of the securities and services that they get involved in. 
A) not be able to pay back the bailout money. 
B) have an incentive to make highly risky investments. 
C) now have to play it safer to reduce their risks. 
D) be limited in terms of the securities and services that they get involved in.

Question 7

Which of the following institutions does not provide checkable-deposit services to the general public?

Accepted Answer

A) commercial banks 
B) savings and loan associations 
C) U.S.Treasury 
D) credit unions 
A) commercial banks 
B) savings and loan associations 
C) U.S.Treasury 
D) credit unions

Question 8

"Thrifts" refers to the following institutions except

Accepted Answer

A) commercial banks. 
B) credit unions. 
C) mutual savings banks. 
D) savings and loan associations. 
A) commercial banks. 
B) credit unions. 
C) mutual savings banks. 
D) savings and loan associations.

Question 9

The Federal Open Market Committee (FOMC) of the Federal Reserve System is primarily for

Accepted Answer

A) maintaining cash reserves that can be used to settle international transactions. 
B) supervising banks to make sure that markets are open to all and remain competitive. 
C) issuing currency and acting as the fiscal agent for the Federal government. 
D) setting the Fed's monetary policy and directing the purchase and sale of government securities. 
A) maintaining cash reserves that can be used to settle international transactions. 
B) supervising banks to make sure that markets are open to all and remain competitive. 
C) issuing currency and acting as the fiscal agent for the Federal government. 
D) setting the Fed's monetary policy and directing the purchase and sale of government securities.

Question 10

TD Ameritrade, Charles Schwab, and Merrill Lynch are all primarily

Accepted Answer

A) investment banks. 
B) mutual fund companies. 
C) insurance companies. 
D) securities firms. 
A) investment banks. 
B) mutual fund companies. 
C) insurance companies. 
D) securities firms.

Question 11

Joe deposits $200 in currency into his checking account at a bank.This deposit is treated as

Accepted Answer

A) a subtraction of $200 from the money supply because the $200 in currency is no longer in circulation. 
B) an addition of $200 to the money supply because of the creation of a checkable deposit of $200. 
C) an addition of $200 to the money supply because the bank holds $200 in currency and the checking account has been increased by $200. 
D) no change in the money supply because the $200 in currency has been converted to a $200 increase in checkable deposits. 
A) a subtraction of $200 from the money supply because the $200 in currency is no longer in circulation. 
B) an addition of $200 to the money supply because of the creation of a checkable deposit of $200. 
C) an addition of $200 to the money supply because the bank holds $200 in currency and the checking account has been increased by $200. 
D) no change in the money supply because the $200 in currency has been converted to a $200 increase in checkable deposits.

Exam 34: Money, Banking, and Financial Institutions

The 12 Federal Reserve Banks are governmentally owned but privately controlled.

"Near monies" are included in

The following financial institutions traditionally accept deposits from savers, except

The 12 Federal Reserve Banks can best be characterized as

Currency held in the vault of First National Bank is

The government bailout of large institutions creates the problem of moral hazard, which means that these large firms will

Which of the following institutions does not provide checkable-deposit services to the general public?

"Thrifts" refers to the following institutions except

The Federal Open Market Committee (FOMC) of the Federal Reserve System is primarily for

TD Ameritrade, Charles Schwab, and Merrill Lynch are all primarily

Joe deposits $200 in currency into his checking account at a bank.This deposit is treated as

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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