Question 1

What is the primary purpose of the Fed's Interdistrict Settlement Fund?

Accepted Answer

A)  to provide electronic check-clearing services to banks 
B)  to change interest rates to help the economy 
C)  to insure depositors' acconts at commercial banks 
D)  to manage the bank accounts of the U.S. government 
A)  to provide electronic check-clearing services to banks 
B)  to change interest rates to help the economy 
C)  to insure depositors' acconts at commercial banks 
D)  to manage the bank accounts of the U.S. government

Question 2

Banks are financial institutions that issue a variety of checking or savings accounts and use the funds to make consumer, business, and mortgage loans.

Accepted Answer

A) True 
 B)False

Question 3

The type of checkable account that credit unions offer is called a

Accepted Answer

A)  share draft account 
B)  certificate of deposit 
C)  demand deposit 
D)  negotiable order of withdrawal 
A)  share draft account 
B)  certificate of deposit 
C)  demand deposit 
D)  negotiable order of withdrawal

Question 4

A negotiable order of withdrawal (NOW) account is a type of checking account that pays interest and typically requires a larger minimum balance than a demand deposit.

Accepted Answer

A) True 
 B)False

Question 5

When people save money to use to make purchases later, money serves as a

Accepted Answer

A)  medium of exchange 
B)  unit of account 
C)  store of value 
D)  standard of debt 
A)  medium of exchange 
B)  unit of account 
C)  store of value 
D)  standard of debt

Question 6

The required reserve ratio is the percentage of ______ that a bank must keep as vault cash or deposits at the Federal Reserve.

Accepted Answer

A)  checking deposits 
B)  savings deposits 
C)  government securities 
D)  corporate stock 
A)  checking deposits 
B)  savings deposits 
C)  government securities 
D)  corporate stock

Question 7

Credit unions offer accounts similar to checking accounts called

Accepted Answer

A)  demand deposits 
B)  NOW accounts 
C)  time deposits 
D)  share drafts 
A)  demand deposits 
B)  NOW accounts 
C)  time deposits 
D)  share drafts

Question 8

Today, all of our paper currency is issued by the

Accepted Answer

A)  U.S. Mint 
B)  U.S. Treasury 
C)  Federal Reserve 
D)  Federal Deposit Insurance Corporation 
A)  U.S. Mint 
B)  U.S. Treasury 
C)  Federal Reserve 
D)  Federal Deposit Insurance Corporation

Question 9

Suppose the required reserve ratio is 10 percent and the public decides to deposit $50 million cash into checking accounts throughout the banking system. This will allow the banking system to create a maximum amount of additional new deposits equal to

Accepted Answer

A)  $40 million 
B)  $50 million 
C)  $450 million 
D)  $500 million 
A)  $40 million 
B)  $50 million 
C)  $450 million 
D)  $500 million

Question 10

Suppose your friend asks you "what type of metal backs our money supply?" An appropriate answer would be

Accepted Answer

A)  gold 
B)  silver 
C)  iron 
D)  there is no metallic backing of our money supply 
A)  gold 
B)  silver 
C)  iron 
D)  there is no metallic backing of our money supply

Question 11

All U.S. currency, including paper money and coins, is designated as ______; that is, the federal government mandates its acceptance in transactions and requires that dollars be used in payment of taxes.

Accepted Answer

A)  medium of exchange 
B)  generally acceptable 
C)  legal tender 
D)  near money 
A)  medium of exchange 
B)  generally acceptable 
C)  legal tender 
D)  near money

Question 12

All of the following are part of the M1 money supply except

Accepted Answer

A)  $100 worth of dollar bills in the vault of American National Bank 
B)  $50 worth of nickels in the hands of John Miller 
C)  $500 in the checking account of Helen Smith 
D)  $40 worth of pennies in the cash register of a Wal-Mart store 
A)  $100 worth of dollar bills in the vault of American National Bank 
B)  $50 worth of nickels in the hands of John Miller 
C)  $500 in the checking account of Helen Smith 
D)  $40 worth of pennies in the cash register of a Wal-Mart store

What is the primary purpose of the Fed's Interdistrict Settlement Fund?

Banks are financial institutions that issue a variety of checking or savings accounts and use the funds to make consumer, business, and mortgage loans.

The type of checkable account that credit unions offer is called a

A negotiable order of withdrawal (NOW) account is a type of checking account that pays interest and typically requires a larger minimum balance than a demand deposit.

When people save money to use to make purchases later, money serves as a

The required reserve ratio is the percentage of ______ that a bank must keep as vault cash or deposits at the Federal Reserve.

Credit unions offer accounts similar to checking accounts called

Today, all of our paper currency is issued by the

Suppose the required reserve ratio is 10 percent and the public decides to deposit $50 million cash into checking accounts throughout the banking system. This will allow the banking system to create a maximum amount of additional new deposits equal to

Suppose your friend asks you "what type of metal backs our money supply?" An appropriate answer would be

All U.S. currency, including paper money and coins, is designated as ______; that is, the federal government mandates its acceptance in transactions and requires that dollars be used in payment of taxes.

All of the following are part of the M₁ money supply except

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters

Exam 14: Money and the Banking System

What is the primary purpose of the Fed's Interdistrict Settlement Fund?

Banks are financial institutions that issue a variety of checking or savings accounts and use the funds to make consumer, business, and mortgage loans.

The type of checkable account that credit unions offer is called a

A negotiable order of withdrawal (NOW) account is a type of checking account that pays interest and typically requires a larger minimum balance than a demand deposit.

When people save money to use to make purchases later, money serves as a

The required reserve ratio is the percentage of ______ that a bank must keep as vault cash or deposits at the Federal Reserve.

Credit unions offer accounts similar to checking accounts called

Today, all of our paper currency is issued by the

Suppose the required reserve ratio is 10 percent and the public decides to deposit $50 million cash into checking accounts throughout the banking system. This will allow the banking system to create a maximum amount of additional new deposits equal to

Suppose your friend asks you "what type of metal backs our money supply?" An appropriate answer would be

All U.S. currency, including paper money and coins, is designated as ______; that is, the federal government mandates its acceptance in transactions and requires that dollars be used in payment of taxes.

All of the following are part of the M1 money supply except

Scarcity and Choice

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters

All of the following are part of the M₁ money supply except