Question 1

Michael's total purchase at Subway is $7.58. He pays with a ten dollar bill knowing he will receive the appropriate change because money is

Accepted Answer

A)  portable. 
B)  durable. 
C)  stable. 
D)  multipliable. 
E)  divisible. 
A)  portable. 
B)  durable. 
C)  stable. 
D)  multipliable. 
E)  divisible.

Question 2

The usual passbook savings account at a commercial bank earns

Accepted Answer

A)  between 0.10 and 0.90 percent. 
B)  about 1.5 percent. 
C)  between 1.5 and 5.0 percent. 
D)  a rate that is adjusted annually. 
E)  a rate that is adjusted every two years. 
A)  between 0.10 and 0.90 percent. 
B)  about 1.5 percent. 
C)  between 1.5 and 5.0 percent. 
D)  a rate that is adjusted annually. 
E)  a rate that is adjusted every two years.

Question 3

Along with stability, all of the following are characteristics of money except

Accepted Answer

A)  durability. 
B)  profitability. 
C)  difficulty of counterfeiting. 
D)  portability. 
E)  divisibility. 
A)  durability. 
B)  profitability. 
C)  difficulty of counterfeiting. 
D)  portability. 
E)  divisibility.

Question 4

All of the following are time deposits except

Accepted Answer

A)  money-market mutual fund shares. 
B)  short-term government securities. 
C)  an interest-bearing savings account. 
D)  a checking account. 
E)  certificates of deposit. 
A)  money-market mutual fund shares. 
B)  short-term government securities. 
C)  an interest-bearing savings account. 
D)  a checking account. 
E)  certificates of deposit.

Question 5

For customers who do their banking solely online, the largest disadvantage is the increased security threat.

Accepted Answer

A) True 
 B)False

Question 6

When Skye purchases a meal at Hardee's, she will probably use the most common form of money today, which is

Accepted Answer

A)  gold. 
B)  a credit card. 
C)  a debit card. 
D)  currency. 
E)  bartering. 
A)  gold. 
B)  a credit card. 
C)  a debit card. 
D)  currency. 
E)  bartering.

Question 7

The person using a banker's acceptance to pay for merchandise can specify the conditions under which a specified dollar amount will be paid to the person who holds the banker's acceptance.

Accepted Answer

A) True 
 B)False

Question 8

The Credit Card Act of 2009 provides new measures of accountability for credit card companies.

Accepted Answer

A) True 
 B)False

Question 9

Joe Barnes opened up an account at Community Credit Union. He is allowed to write checks and earns interest as long as he keeps his account balance above $2,000. In all likelihood, he opened a

Accepted Answer

A)  certificate of deposit. 
B)  savings account. 
C)  mutual bank account. 
D)  NOW account. 
E)  certified account. 
A)  certificate of deposit. 
B)  savings account. 
C)  mutual bank account. 
D)  NOW account. 
E)  certified account.

Question 10

When money does not retain its value over a period of time, people tend to lose faith in their monetary system and turn to other means of storing wealth.

Accepted Answer

A) True 
 B)False

Question 11

One method the Federal Reserve System uses to slow the economy is to

Accepted Answer

A)  sell government bonds to banks and other businesses. 
B)  decrease reserve requirements. 
C)  decrease the discount rate. 
D)  buy government securities. 
E)  decrease salaries paid to the board of governors. 
A)  sell government bonds to banks and other businesses. 
B)  decrease reserve requirements. 
C)  decrease the discount rate. 
D)  buy government securities. 
E)  decrease salaries paid to the board of governors.

Question 12

What are the primary functions of the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Association (NCUA)?

Accepted Answer

The Federal Deposit Insurance Corporatio

Question 13

When you make a purchase with a ___, funds are electronically subtracted from your bank account at the moment the purchase is made.

Accepted Answer

A)  credit card 
B)  check 
C)  debit card 
D)  short-term loan 
E)  NOW checking account 
A)  credit card 
B)  check 
C)  debit card 
D)  short-term loan 
E)  NOW checking account

Question 14

The typical dollar bill has an expected life span of

Accepted Answer

A)  less than two years. 
B)  about six months. 
C)  three years. 
D)  five years. 
E)  seven years. 
A)  less than two years. 
B)  about six months. 
C)  three years. 
D)  five years. 
E)  seven years.

Question 15

A loan that is approved before the money is actually needed is called a(n)

Accepted Answer

A)  collateral loan. 
B)  mortgage. 
C)  amortization. 
D)  security note. 
E)  line of credit. 
A)  collateral loan. 
B)  mortgage. 
C)  amortization. 
D)  security note. 
E)  line of credit.

Question 16

Most of the secretaries at Bingham Insurance Company like to see their paychecks, but not Cynthia Woodward. She signed a special form giving the company permission to transfer her salary directly to her bank account. Companies like Bingham are able to do this through

Accepted Answer

A)  electronic teller machines. 
B)  automated clearinghouses. 
C)  automated teller machines. 
D)  point-of sale terminals. 
E)  bill payments by telephone. 
A)  electronic teller machines. 
B)  automated clearinghouses. 
C)  automated teller machines. 
D)  point-of sale terminals. 
E)  bill payments by telephone.

Question 17

Thad deposits $2,000 in an interest-bearing savings account. This means that Thad has $2,000 in

Accepted Answer

A)  demand deposits. 
B)  time deposits. 
C)  money supply. 
D)  checking accounts. 
E)  available accounts. 
A)  demand deposits. 
B)  time deposits. 
C)  money supply. 
D)  checking accounts. 
E)  available accounts.

Question 18

In order to meet its reserve requirement, ABC Bank can borrow money from other banks at the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 19

The United States trades a shipment of wheat to Saudi Arabia in exchange for a shipment of oil. This type of arrangement is called

Accepted Answer

A)  an exchange medium. 
B)  barter. 
C)  an auction. 
D)  a moneyless transfer. 
E)  electronic commerce. 
A)  an exchange medium. 
B)  barter. 
C)  an auction. 
D)  a moneyless transfer. 
E)  electronic commerce.

Question 20

Businesses generally use short-term loans to obtain new equipment and fund expansion.

Accepted Answer

A) True 
 B)False

Exam 18: Understanding Money, Banking, and Credit

Michael's total purchase at Subway is $7.58. He pays with a ten dollar bill knowing he will receive the appropriate change because money is

The usual passbook savings account at a commercial bank earns

Along with stability, all of the following are characteristics of money except

All of the following are time deposits except

For customers who do their banking solely online, the largest disadvantage is the increased security threat.

When Skye purchases a meal at Hardee's, she will probably use the most common form of money today, which is

The person using a banker's acceptance to pay for merchandise can specify the conditions under which a specified dollar amount will be paid to the person who holds the banker's acceptance.

The Credit Card Act of 2009 provides new measures of accountability for credit card companies.

Joe Barnes opened up an account at Community Credit Union. He is allowed to write checks and earns interest as long as he keeps his account balance above $2,000. In all likelihood, he opened a

When money does not retain its value over a period of time, people tend to lose faith in their monetary system and turn to other means of storing wealth.

One method the Federal Reserve System uses to slow the economy is to

What are the primary functions of the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Association (NCUA)?

When you make a purchase with a ___, funds are electronically subtracted from your bank account at the moment the purchase is made.

The typical dollar bill has an expected life span of

A loan that is approved before the money is actually needed is called a(n)

Most of the secretaries at Bingham Insurance Company like to see their paychecks, but not Cynthia Woodward. She signed a special form giving the company permission to transfer her salary directly to her bank account. Companies like Bingham are able to do this through

Thad deposits $2,000 in an interest-bearing savings account. This means that Thad has $2,000 in

In order to meet its reserve requirement, ABC Bank can borrow money from other banks at the federal funds rate.

The United States trades a shipment of wheat to Saudi Arabia in exchange for a shipment of oil. This type of arrangement is called

Businesses generally use short-term loans to obtain new equipment and fund expansion.

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

Filters