Question 1

A single dollar deposited into a commercial bank has the potential of creating up to $3.50 in the overall money supply.

Accepted Answer

A) True 
 B)False

Question 2

During hearings about the effects of the Troubled Assets Relief Program, Gavin's committee comes to learn that several of the bailed-out banks gave their top officers very high bonuses shortly after the government loaned the banks enough money to keep afloat. Several of Gavin's constituents were quite upset about this. Why would this have been a concern for them?

Accepted Answer

The bailout money came directly from tax

Question 3

Which of the following financial institutions earn profits from loans taken from the funds in each of its depositors' accounts?

Accepted Answer

A)  securities investment firms 
B)  pension funds 
C)  credit unions 
D)  commercial banks 
E)  mutual savings banks 
A)  securities investment firms 
B)  pension funds 
C)  credit unions 
D)  commercial banks 
E)  mutual savings banks

Question 4

Which of the following, if True, would weaken the case for Munschausen's seeking to acquire capital by debt financing?

Accepted Answer

A)  Munschausen has several marketing managers with international experience. 
B)  Munschausen projects rapid growth into international markets that it targets. 
C)  Munschausen plans to sell its products only in the most advanced economies. 
D)  Munschausen will grow its business only slowly for its first several years. 
E)  Munschausen gets its engineering talent from all over the world. 
A)  Munschausen has several marketing managers with international experience. 
B)  Munschausen projects rapid growth into international markets that it targets. 
C)  Munschausen plans to sell its products only in the most advanced economies. 
D)  Munschausen will grow its business only slowly for its first several years. 
E)  Munschausen gets its engineering talent from all over the world.

Question 5

Which of the following transactions is not included among Automated Clearing House payments?

Accepted Answer

A)  ATM deposits 
B)  business-to-business electronic payments 
C)  checks 
D)  Internet-initiated debit card payments 
E)  local tax payments 
A)  ATM deposits 
B)  business-to-business electronic payments 
C)  checks 
D)  Internet-initiated debit card payments 
E)  local tax payments

Question 6

The Federal Reserve Bank has the responsibility of ensuring the reasonableness of the interest rates for business and personal loans within the United States.

Accepted Answer

A) True 
 B)False

Question 7

A very strong euro in comparison to the U.S. dollar would benefit American businesses more than European businesses in the global economy.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Which of the following indices 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 10

Which of the following describes the requirements that the International Monetary Fund has made on certain developing countries?

Accepted Answer

A)  that the government decrease spending in order to bring inflation under control 
B)  that private industries decrease prices in order to bring inflation under control 
C)  that the government increase loans in order to create more money in the local markets 
D)  that the local banks increase loans in order to create more money in the local markets 
E)  that the government and private industries partner in creating more jobs in the region 
A)  that the government decrease spending in order to bring inflation under control 
B)  that private industries decrease prices in order to bring inflation under control 
C)  that the government increase loans in order to create more money in the local markets 
D)  that the local banks increase loans in order to create more money in the local markets 
E)  that the government and private industries partner in creating more jobs in the region

Question 11

Which of the following political bodies appoints the members of the board of governors for the Federal Reserve System?

Accepted Answer

A)  the Senate 
B)  the House of Representatives 
C)  the President of the United States 
D)  the Council of American Governors 
E)  the people of the United States 
A)  the Senate 
B)  the House of Representatives 
C)  the President of the United States 
D)  the Council of American Governors 
E)  the people of the United States

Question 12

During these same hearings, several executives from the bailed-out banks testified that such financial perks as these bonuses were necessary to get the economy rolling again. What arguments might they have used?

Accepted Answer

Not everyone who received bonuses were t

Question 13

The international payments process that moves money between buyers and sellers on different continents is subject to worldwide policy systems.

Accepted Answer

A) True 
 B)False

Question 14

What are the components of the M-2 money supply?

Accepted Answer

The M-2 money supply includes everything

Question 15

David is saving $25 a week toward getting a new truck. Which function of money does this illustrate?

Accepted Answer

A)  stabilization of value 
B)  foundation of banking 
C)  medium of exchange 
D)  store of value 
E)  measure of worth 
A)  stabilization of value 
B)  foundation of banking 
C)  medium of exchange 
D)  store of value 
E)  measure of worth

Question 16

One of the daily responsibilities of the Federal Reserve System is to regulate the current federal funds rate.

Accepted Answer

A) True 
 B)False

Question 17

Explain how current financial institutions can create $342 out of a deposit of $200.

Accepted Answer

After the $200 is deposited into a bank,

Question 18

Which of the following terms refers to the interest level at which member banks can borrow money from the Federal Reserve System?

Accepted Answer

A)  discount rate 
B)  key rate 
C)  prime rate 
D)  federal insurance premium 
E)  reserve requirement 
A)  discount rate 
B)  key rate 
C)  prime rate 
D)  federal insurance premium 
E)  reserve requirement

Question 19

Which of the following best describes the durability characteristic of money?

Accepted Answer

A)  Units of money do not expire after a certain time limit. 
B)  Units of money can be matched with the value of goods. 
C)  Units of money allow people to measure the relative value of goods and services. 
D)  Units of money of different nations are easily converted to other units of money. 
E)  Units of money have lasting value. 
A)  Units of money do not expire after a certain time limit. 
B)  Units of money can be matched with the value of goods. 
C)  Units of money allow people to measure the relative value of goods and services. 
D)  Units of money of different nations are easily converted to other units of money. 
E)  Units of money have lasting value.

Question 20

Toyota, based in Japan, would like to build a new factory and a new retail distribution center. Both or either of these may be built in the United States and in Canada. Currently, the U.S. dollar is weak compared to the Canadian dollar. Which of the following would be in Toyota's best interest?

Accepted Answer

A)  build the cars in Canada and sell them in the United States 
B)  build the cars in the United States and sell them in Canada 
C)  build the cars in Canada and sell them in both countries 
D)  build the cars in the United States and sell them in both countries 
E)  build the cars in both countries and sell them in both countries 
A)  build the cars in Canada and sell them in the United States 
B)  build the cars in the United States and sell them in Canada 
C)  build the cars in Canada and sell them in both countries 
D)  build the cars in the United States and sell them in both countries 
E)  build the cars in both countries and sell them in both countries

A single dollar deposited into a commercial bank has the potential of creating up to $3.50 in the overall money supply.

Which of the following financial institutions earn profits from loans taken from the funds in each of its depositors' accounts?

Which of the following, if True, would weaken the case for Munschausen's seeking to acquire capital by debt financing?

Which of the following transactions is not included among Automated Clearing House payments?

The Federal Reserve Bank has the responsibility of ensuring the reasonableness of the interest rates for business and personal loans within the United States.

A very strong euro in comparison to the U.S. dollar would benefit American businesses more than European businesses in the global economy.

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

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

Which of the following describes the requirements that the International Monetary Fund has made on certain developing countries?

Which of the following political bodies appoints the members of the board of governors for the Federal Reserve System?

During these same hearings, several executives from the bailed-out banks testified that such financial perks as these bonuses were necessary to get the economy rolling again. What arguments might they have used?

The international payments process that moves money between buyers and sellers on different continents is subject to worldwide policy systems.

What are the components of the M-2 money supply?

David is saving $25 a week toward getting a new truck. Which function of money does this illustrate?

One of the daily responsibilities of the Federal Reserve System is to regulate the current federal funds rate.

Explain how current financial institutions can create $342 out of a deposit of $200.

Which of the following terms refers to the interest level at which member banks can borrow money from the Federal Reserve System?

Which of the following best describes the durability characteristic of money?

Toyota, based in Japan, would like to build a new factory and a new retail distribution center. Both or either of these may be built in the United States and in Canada. Currently, the U.S. dollar is weak compared to the Canadian dollar. Which of the following would be in Toyota's best interest?

The Us Business Environment

Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

The Global Context of Business

Business Management

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

Pricing, Distributing, and Promoting Products

Information Technology for Business

The Role of Accountants and Accounting Information

Managing Finances

Filters

Exam 15: Money and Banking

A single dollar deposited into a commercial bank has the potential of creating up to $3.50 in the overall money supply.

Which of the following financial institutions earn profits from loans taken from the funds in each of its depositors' accounts?

Which of the following, if True, would weaken the case for Munschausen's seeking to acquire capital by debt financing?

Which of the following transactions is not included among Automated Clearing House payments?

The Federal Reserve Bank has the responsibility of ensuring the reasonableness of the interest rates for business and personal loans within the United States.

A very strong euro in comparison to the U.S. dollar would benefit American businesses more than European businesses in the global economy.

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

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

Which of the following describes the requirements that the International Monetary Fund has made on certain developing countries?

Which of the following political bodies appoints the members of the board of governors for the Federal Reserve System?

During these same hearings, several executives from the bailed-out banks testified that such financial perks as these bonuses were necessary to get the economy rolling again. What arguments might they have used?

The international payments process that moves money between buyers and sellers on different continents is subject to worldwide policy systems.

What are the components of the M-2 money supply?

David is saving $25 a week toward getting a new truck. Which function of money does this illustrate?

One of the daily responsibilities of the Federal Reserve System is to regulate the current federal funds rate.

Explain how current financial institutions can create $342 out of a deposit of $200.

Which of the following terms refers to the interest level at which member banks can borrow money from the Federal Reserve System?

Which of the following best describes the durability characteristic of money?

Toyota, based in Japan, would like to build a new factory and a new retail distribution center. Both or either of these may be built in the United States and in Canada. Currently, the U.S. dollar is weak compared to the Canadian dollar. Which of the following would be in Toyota's best interest?

The Us Business Environment

Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

The Global Context of Business

Business Management

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

Pricing, Distributing, and Promoting Products

Information Technology for Business

The Role of Accountants and Accounting Information

Managing Finances

Filters