Exam 14: Money and the Banking System

Checking accounts perform the same functions as currency so they are considered money.

The Comptroller of the Currency insures savings deposits and demand deposits up to $100,000 in virtually all U.S. banks.

A single commercial bank can legally increase its loans by an amount up to its

Barter is defined as a system that has no

The M₁ money supply consists of demand deposits, savings deposits, currency, and traveler's checks in the hands of the public.

Which type of check generally provides the least certainty of payment?

Suppose that Chase Manhattan Bank has $100 million in actual reserves, $50 million in checking deposits, and the required reserve ratio is 20 percent. The bank's excess reserves equal

If you have a dollar bill that is partially destroyed, but has about 2/3 remaining, you should

The assets of a bank include all of the following except

The average life of a $1 bill is

With interest compounding, a bank pays interest on the interest you've already earned in your deposit.

Visa and MasterCard accounts typically offer a grace period built into their payment schedule.

Actual reserves equals required reserves plus excess reserves.

The FDIC was created because of the

The basic money supply, M₁, places primary emphasis on money as a

In the United States, all paper money and coins are legal tender.

Without a medium of exchange, people would have to trade their goods or services directly for other goods or services, a practice known as barter.

To prevent bank failure, the Federal Deposit Insurance Corporation sometimes

Although a bank may allow you to withdraw your checking funds from an ATM, a fee is frequently charged.

If a banks' assets are $75 million, and its liabilities are $45 million, then we can say the