Exam 18: Understanding Money, Banking, and Credit

The federal funds rate is the interest rate at which the Federal Reserve lends money to commercial banks for a three-day period in order for the bank to meet its reserve requirements.

Which of the following pairs of tools both have the same effect on the economy?

The FDIC provides basic deposit insurance of ____ per depositor.

A written order for the bank to pay a third party a stated amount of money on a specific date without any conditions or strings attached is called a(n)

Which of the following is not an upcoming change within the banking industry that experts tend to agree upon?

Money that is held and spent later represents a ____, or a means for retaining and accumulating wealth.

The amount a credit-card company charges a merchant for accepting credit cards depends on all of the following factors except the

Judy Martinez, owner of Judy's Fashions, received a $12,000 tax refund. She deposited the money in Chase Bank. The terms of the agreement are that she must leave the money on deposit for three years and the bank will pay her 2.0 percent interest. Her account is a

Assume you are the owner of a small construction firm in need of a $12,000 business loan. What steps can you take to improve your chances of getting a loan from your banker?

Banks that are chartered by their state authorities outnumber national banks by about six to one.

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. In giving examples to new employees, Jeffrey has indicated that when customers put their money in a bank, some are looking to retain and accumulate wealth. This refers to which of the following functions of money?

When reserve requirements are low, there is

Real or personal property that a firm or individual owns and that is pledged as security for a loan is called

Metal coins and paper bills, which generally are called currency, are the objects most commonly used for money.

A means for performing financial transactions through a computer terminal or telephone hookup is

The Credit Card Act of ___ provides additional protections for credit card customers.

At the bank where Natasha works, loans are made on the money that customers deposit and then in turn on what borrowers deposit, which allows the bank to make more loans. This is referred to as

Betsy Garnett applied for a loan at Capital Bank. When the bank officer interviewed her, he asked her how much money she made. The loan officer was concerned about Betsy's

In explaining money to his twelve-year-old, Mike, the president of a small business, said that money is "symbolic." This should be correctly interpreted to mean that money is

The most important regulation tool used by the Federal Reserve System is open- market operations.