Exam 18: Understanding Money, Banking, and Credit

What is the term for the interest rate that the Federal Reserve System charges for loans to member banks? What happens to the amount of lending banks do when this interest rate is raised?

The buying and selling of U.S. government securities by the Federal Reserve System for the purpose of controlling the supply of money is called

Bob Jones believes that some information in his credit file is inaccurate. Therefore, he

The primary function of the Federal Reserve System is to maintain a healthy economy by regulating the supply of money.

A barter system exists when one person trades goods or services to another person for money.

The Federal Reserve is responsible for regulating the U.S. banking industry.

A short-term loan is a loan that usually will be paid back within one year or less.

A friend overhears your conversation with another friend, who is discussing his new job with "the Fed." What does the term Fed stand for?

When you use a debit card to pay for a purchase, the amount of the purchase is subtracted from your bank account at the moment the purchase is completed.

Like other businesses, a bank's primary mission is to

There are approximately 1,900 national banks.

Vance Co. is required to provide collateral in order to obtain a long-term business loan. Which of the following would not be acceptable collateral to most lenders?

Commercial banks have experienced competition from all of the following except

The Credit Card Act is credited with leveling the playing field between credit card customers and financial institutions that issue the cards. Which of the following is not provided for in the act?

Five-, ten-, twenty-, fifty-, and hundred-dollar bills provide portability and make money easy to carry.

In the Federal Reserve System, there are ____ district banks.

Using the current margin requirement, investors can purchase more stock than they could afford to purchase if they used their available cash.

Laura keeps only $250,000 combined in her savings and checking accounts at Union Bank because she knows that

Which of the following may offer as high as 2 percent rate of return?

What is the difference between a short-term and a long-term loan? What does it mean to say that collateral is required for a loan?