Exam 18: Understanding Money, Banking, and Credit

If Boulder Co. fails to make payments on its long-term business loan for earthmoving equipment, the bank will repossess it because the equipment serves as

The responsibility for insuring deposits against bank failures is held by the

Often, banks will exchange one currency for another to aid firms conducting international business transactions.

The major problem with automated teller machines is that they are available only during regular banking hours.

Community Bank Jeffrey is the training manager for the Community Bank in Maryland. Jeffrey has developed a training program for all new employees that emphasizes understanding the basics of money. Jeffrey and the bank's management believe that if the employees understand the basics of money, they can utilize the information in their own personal finances as well as guide and answer questions from bank customers. The bank recently hired Laila. She was hired at a high-level position because she brought with her extensive bank management experience. Laila's responsibilities included making sure that the reserve requirement would always be met and keeping track of the interest rate that the Federal Reserve System charged for loans to member banks. -Refer to Community Bank. One employee asked Jeffrey how much money could be found in the whole country. Jeffrey indicated that the government tracks this type of information via supply of money. What are the main measures of the supply of money?

With a(n) ____, certain conditions can be specified before payment is made.

M&B Bank Ken is a senior manager at M&B Bank. Initially, he started as a front counter worker and slowly progressed up the career ladder. In his role as a senior manager, Ken is keeping a keen eye on the industry, the Federal Reserve System, and the bank's competitors. Ken's previous boss did not do that well, and as a result the bank had suffered. Several employees have pointed out that many businesses are not aware of the procedures for or a systematic way to evaluate the creditworthiness of their customers, collect past-due payments from customers, and protect their businesses from such losses. Based on feedback from several employees, M&B has decided to offer credit-counseling workshops for individuals and small businesses. -Refer to M&B Bank. M&B is chartered by the U.S. Comptroller of the Currency. M&B can be described as which of the following?

How do checking accounts and certificates of deposit differ with respect to how quickly a depositor can spend these funds?

A written order for a bank or other financial institution to pay a stated dollar amount to a specified business or person is called a

When the Federal Reserve wants to stimulate the economy, it is likely to

M&B Bank Ken is a senior manager at M&B Bank. Initially, he started as a front counter worker and slowly progressed up the career ladder. In his role as a senior manager, Ken is keeping a keen eye on the industry, the Federal Reserve System, and the bank's competitors. Ken's previous boss did not do that well, and as a result the bank had suffered. Several employees have pointed out that many businesses are not aware of the procedures for or a systematic way to evaluate the creditworthiness of their customers, collect past-due payments from customers, and protect their businesses from such losses. Based on feedback from several employees, M&B has decided to offer credit-counseling workshops for individuals and small businesses. -Refer to M&B Bank. As Ken keeps an eye on the industry, he notices many changes. Which of the following is not a change that Ken would have noticed or obtained information about?

The NCUA insures all accounts of the Federal Reserve System.

All of the following are functions of the Federal Reserve System except to

What is included in the M₁ supply of money? How does the definition of M₁ differ from the definition of M₂?

The U.S. Treasury is responsible for enforcing the Truth-in-Lending Act.

Define reserve requirement. Who sets it? What happens to the amount of money a bank loans when its reserve requirement is raised? When it is lowered?

Because it is the common denominator that we use to compare products and decide which ones we will buy, money functions as a(n)

Anything used by a society to purchase products and services or resources is called

Recall a time when the economy was very strong for several years, and business was booming. During that time, however, prices began to increase, and there was fear that the increase may have continued for an extended period of time. Which of the following actions could the Fed have taken to counteract the increasing prices?

It is easy for Mark to compare the differences in price when he is shopping for a new truck because money is a