Question 1

Assuming no other changes,if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion,the:

Accepted Answer

A)  M1 money supply will decline. 
B)  M1 money supply will not change. 
C)  M2 money supply will decline. 
D)  M2 money supply will increase. 
A)  M1 money supply will decline. 
B)  M1 money supply will not change. 
C)  M2 money supply will decline. 
D)  M2 money supply will increase.

Question 2

Which of the following financial institutions was acquired by Bank of America as a result of the financial crisis of 2007 and 2008?

Accepted Answer

A)  Merrill Lynch 
B)  Lehman Brothers 
C)  Goldman Sachs 
D)  AIG 
A)  Merrill Lynch 
B)  Lehman Brothers 
C)  Goldman Sachs 
D)  AIG

Question 3

In the United States,the money supply (M1)is comprised of:

Accepted Answer

A)  coins,paper currency,and checkable deposits. 
B)  currency,checkable deposits,and Series E bonds. 
C)  coins,paper currency,checkable deposits,and credit balances with brokers. 
D)  paper currency,coins,gold certificates,and time deposits. 
A)  coins,paper currency,and checkable deposits. 
B)  currency,checkable deposits,and Series E bonds. 
C)  coins,paper currency,checkable deposits,and credit balances with brokers. 
D)  paper currency,coins,gold certificates,and time deposits.

Question 4

If the price index rises from 100 to 120,the purchasing power value of the dollar:

Accepted Answer

A)  may either rise or fall. 
B)  will rise by one-sixth. 
C)  will fall by one-sixth. 
D)  will rise by 20 percent. 
A)  may either rise or fall. 
B)  will rise by one-sixth. 
C)  will fall by one-sixth. 
D)  will rise by 20 percent.

Question 5

In February 2013,the supply of money (M1)in the United States was about:

Accepted Answer

A)  $1,112 billion. 
B)  $2,472 billion. 
C)  $1,359 billion. 
D)  $10,412 billion. 
A)  $1,112 billion. 
B)  $2,472 billion. 
C)  $1,359 billion. 
D)  $10,412 billion.

Question 6

Currency held in the vault of First National Bank is:

Accepted Answer

A)  counted as part of M1. 
B)  counted as part of M2 but not M1. 
C)  only counted as part of M1 if it was deposited into a checking account. 
D)  not counted as part of the money supply. 
A)  counted as part of M1. 
B)  counted as part of M2 but not M1. 
C)  only counted as part of M1 if it was deposited into a checking account. 
D)  not counted as part of the money supply.

Question 7

Thrifts are known as "banker's banks" because they lend money to commercial banks.

Accepted Answer

A) True 
 B)False

Question 8

To say that coins are "token money" means that:

Accepted Answer

A)  their face value is less than their intrinsic value. 
B)  their face value is greater than their intrinsic value. 
C)  their face value is equal to their intrinsic value. 
D)  they are not legal tender. 
A)  their face value is less than their intrinsic value. 
B)  their face value is greater than their intrinsic value. 
C)  their face value is equal to their intrinsic value. 
D)  they are not legal tender.

Question 9

How much did the U.S.Congress allocate to the Troubled Asset Relief Program in 2008?

Accepted Answer

A)  $170 billion. 
B)  $700 billion. 
C)  $787 billion. 
D)  $885 billion. 
A)  $170 billion. 
B)  $700 billion. 
C)  $787 billion. 
D)  $885 billion.

Question 10

When economists say that money serves as a store of value,they mean that it is:

Accepted Answer

A)  a way to keep wealth in a readily spendable form for future use. 
B)  a means of payment. 
C)  a monetary unit for measuring and comparing the relative values of goods. 
D)  declared as legal tender by the government. 
A)  a way to keep wealth in a readily spendable form for future use. 
B)  a means of payment. 
C)  a monetary unit for measuring and comparing the relative values of goods. 
D)  declared as legal tender by the government.

Question 11

The money supply is backed:

Accepted Answer

A)  by the government's ability to control the supply of money and therefore to keep its value relatively stable. 
B)  by government bonds. 
C)  dollar-for-dollar by gold and silver. 
D)  by gold reserves representing a fraction of the total value of dollars in circulation. 
A)  by the government's ability to control the supply of money and therefore to keep its value relatively stable. 
B)  by government bonds. 
C)  dollar-for-dollar by gold and silver. 
D)  by gold reserves representing a fraction of the total value of dollars in circulation.

Question 12

Which of the following financial institutions declared bankruptcy as a result of the financial crisis of 2007 and 2008?

Accepted Answer

A)  Merrill Lynch 
B)  Lehman Brothers 
C)  Goldman Sachs 
D)  AIG 
A)  Merrill Lynch 
B)  Lehman Brothers 
C)  Goldman Sachs 
D)  AIG

Question 13

Answer the question on the basis of the following list of assets: 1.Large-denominated ($100,000 and over)time deposits
2)Noncheckable savings deposits
3)Currency (coins and paper money)in circulation
4)Small-denominated (under $100,000)time deposits
5)Stock certificates
6)Checkable deposits
7)Money market deposit accounts
8)Money market mutual fund balances held by individuals
9)Money market mutual fund balances held by businesses
10)Currency held in bank vaults
Refer to the given list.Which of the following are considered to be "near-monies?"

Accepted Answer

A)  Items 2,5,8,and 9. 
B)  All items except for 3. 
C)  Items 2,4,7,and 8. 
D)  Items 1,5,and 10. 
A)  Items 2,5,8,and 9. 
B)  All items except for 3. 
C)  Items 2,4,7,and 8. 
D)  Items 1,5,and 10.

Question 14

When economists say that money serves as a unit of account,they mean that it is:

Accepted Answer

A)  a way to keep wealth in a readily spendable form for future use. 
B)  a means of payment. 
C)  a monetary unit for measuring and comparing the relative values of goods. 
D)  declared as legal tender by the government. 
A)  a way to keep wealth in a readily spendable form for future use. 
B)  a means of payment. 
C)  a monetary unit for measuring and comparing the relative values of goods. 
D)  declared as legal tender by the government.

Question 15

Which of the following statements is true as a result of Federal Reserve efforts to rescue the financial industry from the financial crisis of 2007 and 2008?

Accepted Answer

A)  From February 2008 to May 2009,the Fed oversaw the consolidation of 20 major financial institutions into fewer than a dozen. 
B)  From March 2008 to February 2009,the Fed experienced a 50 percent decline in the value of assets held. 
C)  From February 2008 to March 2009,Fed assets more than doubled to nearly $2 trillion. 
D)  From February 2008 to March 2009,Fed lending caused the U.S.public debt to rise by over $1 trillion. 
A)  From February 2008 to May 2009,the Fed oversaw the consolidation of 20 major financial institutions into fewer than a dozen. 
B)  From March 2008 to February 2009,the Fed experienced a 50 percent decline in the value of assets held. 
C)  From February 2008 to March 2009,Fed assets more than doubled to nearly $2 trillion. 
D)  From February 2008 to March 2009,Fed lending caused the U.S.public debt to rise by over $1 trillion.

Question 16

Which of the following statements best describes the 12 Federal Reserve Banks?

Accepted Answer

A)  They are privately owned and privately controlled central banks whose basic goal is to provide an ample and orderly market for U.S.Treasury securities. 
B)  They are privately owned and publicly controlled central banks whose basic function is to minimize the risks in commercial banking in order to make it a reasonably profitable industry. 
C)  They are privately owned and publicly controlled central banks whose basic goal is to control the money supply and interest rates in promoting the general economic welfare. 
D)  They are privately owned and publicly controlled central banks whose basic goal is to earn profits for their owners. 
A)  They are privately owned and privately controlled central banks whose basic goal is to provide an ample and orderly market for U.S.Treasury securities. 
B)  They are privately owned and publicly controlled central banks whose basic function is to minimize the risks in commercial banking in order to make it a reasonably profitable industry. 
C)  They are privately owned and publicly controlled central banks whose basic goal is to control the money supply and interest rates in promoting the general economic welfare. 
D)  They are privately owned and publicly controlled central banks whose basic goal is to earn profits for their owners.

Question 17

Which role of the Federal Reserve was expanded directly as a result of the PDCF and TSLF?

Accepted Answer

A)  Supervising banks. 
B)  Lender of last resort. 
C)  Fiscal agent for the federal government. 
D)  Issuing currency. 
A)  Supervising banks. 
B)  Lender of last resort. 
C)  Fiscal agent for the federal government. 
D)  Issuing currency.

Question 18

Firms whose central business is to offer security advice and buy and sell individual stocks and bonds for clients are known as:

Accepted Answer

A)  thrifts. 
B)  pension fund companies. 
C)  securities firms. 
D)  insurance companies. 
A)  thrifts. 
B)  pension fund companies. 
C)  securities firms. 
D)  insurance companies.

Question 19

The Federal Deposit Insurance Corporation (FDIC)insures deposits up to $250,000 in:

Accepted Answer

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

Question 20

Answer the question on the basis of the following list of assets: 1.Large-denominated ($100,000 and over)time deposits
2)Noncheckable savings deposits
3)Currency (coins and paper money)in circulation
4)Small-denominated (under $100,000)time deposits
5)Stock certificates
6)Checkable deposits
7)Money market deposit accounts
8)Money market mutual fund balances held by individuals
9)Money market mutual fund balances held by businesses
10)Currency held in bank vaults
Refer to the given list.The M1 definition of money comprises item(s):

Accepted Answer

A)  6 only. 
B)  3,4,and 6. 
C)  3 and 6. 
D)  3,6,and 10. 
A)  6 only. 
B)  3,4,and 6. 
C)  3 and 6. 
D)  3,6,and 10.

Assuming no other changes,if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion,the:

Which of the following financial institutions was acquired by Bank of America as a result of the financial crisis of 2007 and 2008?

In the United States,the money supply (M1)is comprised of:

If the price index rises from 100 to 120,the purchasing power value of the dollar:

In February 2013,the supply of money (M1)in the United States was about:

Currency held in the vault of First National Bank is:

Thrifts are known as "banker's banks" because they lend money to commercial banks.

To say that coins are "token money" means that:

How much did the U.S.Congress allocate to the Troubled Asset Relief Program in 2008?

When economists say that money serves as a store of value,they mean that it is:

The money supply is backed:

Which of the following financial institutions declared bankruptcy as a result of the financial crisis of 2007 and 2008?

When economists say that money serves as a unit of account,they mean that it is:

Which of the following statements is true as a result of Federal Reserve efforts to rescue the financial industry from the financial crisis of 2007 and 2008?

Which of the following statements best describes the 12 Federal Reserve Banks?

Which role of the Federal Reserve was expanded directly as a result of the PDCF and TSLF?

Firms whose central business is to offer security advice and buy and sell individual stocks and bonds for clients are known as:

The Federal Deposit Insurance Corporation (FDIC)insures deposits up to $250,000 in:

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

Filters

Exam 33: Money, Banking, and Financial Institutions

Assuming no other changes,if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion,the:

Which of the following financial institutions was acquired by Bank of America as a result of the financial crisis of 2007 and 2008?

In the United States,the money supply (M1)is comprised of:

If the price index rises from 100 to 120,the purchasing power value of the dollar:

In February 2013,the supply of money (M1)in the United States was about:

Currency held in the vault of First National Bank is:

Thrifts are known as "banker's banks" because they lend money to commercial banks.

To say that coins are "token money" means that:

How much did the U.S.Congress allocate to the Troubled Asset Relief Program in 2008?

When economists say that money serves as a store of value,they mean that it is:

The money supply is backed:

Which of the following financial institutions declared bankruptcy as a result of the financial crisis of 2007 and 2008?

When economists say that money serves as a unit of account,they mean that it is:

Which of the following statements is true as a result of Federal Reserve efforts to rescue the financial industry from the financial crisis of 2007 and 2008?

Which of the following statements best describes the 12 Federal Reserve Banks?

Which role of the Federal Reserve was expanded directly as a result of the PDCF and TSLF?

Firms whose central business is to offer security advice and buy and sell individual stocks and bonds for clients are known as:

The Federal Deposit Insurance Corporation (FDIC)insures deposits up to $250,000 in:

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

Filters