Question 1

Other things equal,an excessive increase in the money supply will:

Accepted Answer

A)  increase the purchasing power of each dollar. 
B)  decrease the purchasing power of each dollar. 
C)  have no impact on the purchasing power of the dollar. 
D)  reduce the price level. 
A)  increase the purchasing power of each dollar. 
B)  decrease the purchasing power of each dollar. 
C)  have no impact on the purchasing power of the dollar. 
D)  reduce the price level. B

Question 2

A $70 price tag on a sweater in a department store window is an example of money functioning as a:

Accepted Answer

A)  unit of account. 
B)  standard of deferred payments. 
C)  store of value. 
D)  medium of exchange. 
A)  unit of account. 
B)  standard of deferred payments. 
C)  store of value. 
D)  medium of exchange. A

Question 3

If you write a check on a bank to purchase a used Honda Civic,you are using money primarily as:

Accepted Answer

A)  a medium of exchange. 
B)  a store of value. 
C)  a unit of account. 
D)  an economic investment. 
A)  a medium of exchange. 
B)  a store of value. 
C)  a unit of account. 
D)  an economic investment. A

Question 4

To say that the Federal Reserve Banks are quasi-public banks means that:

Accepted Answer

A)  they are privately owned but managed in the public interest. 
B)  they deal only with banks of foreign nations and do not have direct business contact with U.S.banks. 
C)  they deal only with commercial banks,and not the public. 
D)  they are publicly owned but privately managed. 
A)  they are privately owned but managed in the public interest. 
B)  they deal only with banks of foreign nations and do not have direct business contact with U.S.banks. 
C)  they deal only with commercial banks,and not the public. 
D)  they are publicly owned but privately managed.

Question 5

Coins held in commercial banks are:

Accepted Answer

A)  included in M1 but not in M2. 
B)  included both in M1 and in M2. 
C)  included in M2 but not in M1. 
D)  not part of the nation's money supply. 
A)  included in M1 but not in M2. 
B)  included both in M1 and in M2. 
C)  included in M2 but not in M1. 
D)  not part of the nation's money supply.

Question 6

If you are estimating your total expenses for school next semester,you are using money primarily as:

Accepted Answer

A)  a medium of exchange. 
B)  a store of value. 
C)  a unit of account. 
D)  an economic investment. 
A)  a medium of exchange. 
B)  a store of value. 
C)  a unit of account. 
D)  an economic investment.

Question 7

Which of these pairs of financial institutions are most alike in terms of their main lines of business?

Accepted Answer

A)  Commercial banks and thrifts. 
B)  Insurance companies and mutual fund companies. 
C)  Thrifts and securities firms. 
D)  Pension fund companies and commercial banks. 
A)  Commercial banks and thrifts. 
B)  Insurance companies and mutual fund companies. 
C)  Thrifts and securities firms. 
D)  Pension fund companies and commercial banks.

Question 8

The central authority of the U.S.banking system is the:

Accepted Answer

A)  Federal Open Market Committee (FOM
C) . 
B)  Board of Governors of the Federal Reserve. 
C)  Federal Monetary Authority. 
D)  Council of Economic Advisers. 
A)  Federal Open Market Committee (FOM
C) . 
B)  Board of Governors of the Federal Reserve. 
C)  Federal Monetary Authority. 
D)  Council of Economic Advisers.

Question 9

New York Life,Prudential,and Hartford are all primarily:

Accepted Answer

A)  commercial banks. 
B)  mutual fund companies. 
C)  insurance companies. 
D)  securities firms. 
A)  commercial banks. 
B)  mutual fund companies. 
C)  insurance companies. 
D)  securities firms.

Question 10

Fidelity,Putnam,Janus,and Vanguard are examples of mutual fund companies.

Accepted Answer

A) True 
 B)False

Question 11

Suppose that the federal government suddenly declared that wheat was to be used as money.What is a possible outcome of that decision?

Accepted Answer

A)  The value of the "wheat dollar" would be unstable depending on crop yields from year to year. 
B)  Farmers would replace corn and soy crops with wheat. 
C)  Wheat would function as money so long as people accept it in exchange for goods and services. 
D)  All of these are possible outcomes. 
A)  The value of the "wheat dollar" would be unstable depending on crop yields from year to year. 
B)  Farmers would replace corn and soy crops with wheat. 
C)  Wheat would function as money so long as people accept it in exchange for goods and services. 
D)  All of these are possible outcomes.

Question 12

"Subprime mortgage loans" refer to:

Accepted Answer

A)  high-interest-rate loans to home buyers with above-average credit risk. 
B)  home-buying loans that charge interest rates below the prime interest rate. 
C)  loans to buyers of homes that are in need of substantial repair. 
D)  loans from the Federal Reserve to home mortgage lenders to support a greater volume of home-buying loans at affordable interest rates. 
A)  high-interest-rate loans to home buyers with above-average credit risk. 
B)  home-buying loans that charge interest rates below the prime interest rate. 
C)  loans to buyers of homes that are in need of substantial repair. 
D)  loans from the Federal Reserve to home mortgage lenders to support a greater volume of home-buying loans at affordable interest rates.

Question 13

The 12 Federal Reserve Banks are governmentally owned but privately controlled.

Accepted Answer

A) True 
 B)False

Question 14

TIAA-CREF,Teamsters' Union,and CalPERS are all primarily:

Accepted Answer

A)  commercial banks. 
B)  thrifts. 
C)  insurance companies. 
D)  pension funds. 
A)  commercial banks. 
B)  thrifts. 
C)  insurance companies. 
D)  pension funds.

Question 15

The value of money varies:

Accepted Answer

A)  inversely with the price level. 
B)  directly with the volume of employment. 
C)  directly with the price level. 
D)  directly with the interest rate. 
A)  inversely with the price level. 
B)  directly with the volume of employment. 
C)  directly with the price level. 
D)  directly with the interest rate.

Question 16

Commercial banks and thrift institutions:

Accepted Answer

A)  differ because thrifts cannot make loans. 
B)  differ because thrifts cannot offer checkable deposits. 
C)  have become less similar in recent years. 
D)  have become increasingly similar in recent years. 
A)  differ because thrifts cannot make loans. 
B)  differ because thrifts cannot offer checkable deposits. 
C)  have become less similar in recent years. 
D)  have become increasingly similar in recent years.

Question 17

After years of aiding drug cartels,mobsters,and terrorist groups laundering money,HSBC bank was:

Accepted Answer

A)  fined about five weeks' worth of profits. 
B)  taken over and run by the government,pending reorganization. 
C)  dismantled by the government,with different sectors in the bank sold to other banks in the system. 
D)  fined nearly $1 trillion,and key executives were held criminally responsible. 
A)  fined about five weeks' worth of profits. 
B)  taken over and run by the government,pending reorganization. 
C)  dismantled by the government,with different sectors in the bank sold to other banks in the system. 
D)  fined nearly $1 trillion,and key executives were held criminally responsible.

Question 18

Currency (paper money plus coins)constitutes about:

Accepted Answer

A)  24 percent of the U.S.M1 money supply. 
B)  45 percent of the U.S.M1 money supply. 
C)  51 percent of the U.S.M1 money supply. 
D)  55 percent of the U.S.M1 money supply. 
A)  24 percent of the U.S.M1 money supply. 
B)  45 percent of the U.S.M1 money supply. 
C)  51 percent of the U.S.M1 money supply. 
D)  55 percent of the U.S.M1 money supply.

Question 19

The Federal Reserve System was created in:

Accepted Answer

A)  1926. 
B)  1946. 
C)  1895. 
D)  1913. 
A)  1926. 
B)  1946. 
C)  1895. 
D)  1913.

Question 20

A $20 bill is a:

Accepted Answer

A)  gold certificate. 
B)  Treasury note. 
C)  Treasury bill. 
D)  Federal Reserve Note. 
A)  gold certificate. 
B)  Treasury note. 
C)  Treasury bill. 
D)  Federal Reserve Note.

Exam 33: Money, Banking, and Financial Institutions

Other things equal,an excessive increase in the money supply will:

A $70 price tag on a sweater in a department store window is an example of money functioning as a:

If you write a check on a bank to purchase a used Honda Civic,you are using money primarily as:

To say that the Federal Reserve Banks are quasi-public banks means that:

Coins held in commercial banks are:

If you are estimating your total expenses for school next semester,you are using money primarily as:

Which of these pairs of financial institutions are most alike in terms of their main lines of business?

The central authority of the U.S.banking system is the:

New York Life,Prudential,and Hartford are all primarily:

Fidelity,Putnam,Janus,and Vanguard are examples of mutual fund companies.

Suppose that the federal government suddenly declared that wheat was to be used as money.What is a possible outcome of that decision?

"Subprime mortgage loans" refer to:

The 12 Federal Reserve Banks are governmentally owned but privately controlled.

TIAA-CREF,Teamsters' Union,and CalPERS are all primarily:

The value of money varies:

Commercial banks and thrift institutions:

After years of aiding drug cartels,mobsters,and terrorist groups laundering money,HSBC bank was:

Currency (paper money plus coins)constitutes about:

The Federal Reserve System was created in:

A $20 bill is a:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

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