Question 1

The so-called near-monies have the following characteristics, except:

Accepted Answer

A)  Highly liquid assets 
B)  Not a means of payment 
C)  Part of money supply M1 
D)  Readily converted into cash 
A)  Highly liquid assets 
B)  Not a means of payment 
C)  Part of money supply M1 
D)  Readily converted into cash

Question 2

Money in the U.S. is essentially debt of:

Accepted Answer

A)  Businesses and the banks 
B)  The Federal Reserve System and the banks 
C)  The national and local governments 
D)  Businesses and the Federal Reserve System 
A)  Businesses and the banks 
B)  The Federal Reserve System and the banks 
C)  The national and local governments 
D)  Businesses and the Federal Reserve System

Question 3

"Thrifts" refer to the following institutions, except:

Accepted Answer

A)  Commercial banks 
B)  Credit unions 
C)  Mutual savings banks 
D)  Savings and loan associations 
A)  Commercial banks 
B)  Credit unions 
C)  Mutual savings banks 
D)  Savings and loan associations

Question 4

People can generally get the following items at their commercial banks, except:

Accepted Answer

A)  Money market deposit accounts 
B)  Time deposits 
C)  Certificates of deposit 
D)  Money market mutual funds 
A)  Money market deposit accounts 
B)  Time deposits 
C)  Certificates of deposit 
D)  Money market mutual funds

Question 5

If the price index rises from 100 to 130, then the purchasing power of the dollar will fall by about:

Accepted Answer

A)  15 percent 
B)  19 percent 
C)  23 percent 
D)  30 percent 
A)  15 percent 
B)  19 percent 
C)  23 percent 
D)  30 percent

Question 6

Given the fact that "too big to fail" could translate into "too big to jail", many economists are calling for a return to the separation of high-risk from the low-risk activities in the financial sector. This separation is embodied in the Wall Street Reform and Consumer Protection Act of 2010 in the so-called:

Accepted Answer

A)  Greenspan Policy 
B)  Volker Rule 
C)  Bernanke Policy 
D)  Obama Rule 
A)  Greenspan Policy 
B)  Volker Rule 
C)  Bernanke Policy 
D)  Obama Rule

Question 7

When there is inflation in the economy, it implies that the:

Accepted Answer

A)  Price index is rising and the purchasing power of money is also rising 
B)  Price index is falling and the purchasing power of money is also falling 
C)  Price index is falling and the purchasing power of money is rising 
D)  Price index is rising and the purchasing power of money is falling 
A)  Price index is rising and the purchasing power of money is also rising 
B)  Price index is falling and the purchasing power of money is also falling 
C)  Price index is falling and the purchasing power of money is rising 
D)  Price index is rising and the purchasing power of money is falling

Question 8

A few years prior to the Financial Crisis of 2007-2008, many people were getting approved for mortgage loans even without proper documentation or credit checks.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not true about the Federal Reserve banks?

Accepted Answer

A)  They serve as bankers' banks 
B)  They are privately owned but government-controlled 
C)  Unlike other banks, they are not motivated by profits 
D)  They compete with commercial banks in their basic functions 
A)  They serve as bankers' banks 
B)  They are privately owned but government-controlled 
C)  Unlike other banks, they are not motivated by profits 
D)  They compete with commercial banks in their basic functions

Question 10

Which group is responsible for the policy decision of changing the money supply?

Accepted Answer

A)  Federal Open Market Committee 
B)  Office of Management and Budget 
C)  Thrift Advisory Council 
D)  Federal Advisory Council 
A)  Federal Open Market Committee 
B)  Office of Management and Budget 
C)  Thrift Advisory Council 
D)  Federal Advisory Council

Question 11

The currency held in the vaults of commercial banks is included in the money supply M1.

Accepted Answer

A) True 
 B)False

Question 12

How many members can serve on the Board of Governors of the Federal Reserve System?

Accepted Answer

A)  7 
B)  9 
C)  12 
D)  14 
A)  7 
B)  9 
C)  12 
D)  14

Question 13

The general public can open deposit accounts at their district's Federal Reserve Bank.

Accepted Answer

A) True 
 B)False

Question 14

The Federal Reserve System performs many functions but its most important one is:

Accepted Answer

A)  Issuing currency 
B)  Controlling the money supply 
C)  Providing for check clearing and collection 
D)  Acting as fiscal agent for the U.S. government 
A)  Issuing currency 
B)  Controlling the money supply 
C)  Providing for check clearing and collection 
D)  Acting as fiscal agent for the U.S. government

Question 15

Refer to the table above. The size of the M1 money supply is:

Accepted Answer

A)  $979 billion 
B)  $1,236 billion 
C)  $1,415 billion 
D)  $1,618 billion 
A)  $979 billion 
B)  $1,236 billion 
C)  $1,415 billion 
D)  $1,618 billion

Question 16

Use the following list to answer the question about the money supply. Items
1) Money market mutual funds held by individuals
2) Savings deposits, including money market deposit accounts
3) Money market mutual funds held by businesses
4) Currency held by the public
5) Small time deposits
6) Checkable deposits
Refer to the list above. The M2 money supply is composed of items:

Accepted Answer

A)  1, 2, 3, 4, 5, and 6 
B)  1, 2, 4, 5, and 6 
C)  1, 2, 4, and 6 
D)  2, 4, 5, and 6 
A)  1, 2, 3, 4, 5, and 6 
B)  1, 2, 4, 5, and 6 
C)  1, 2, 4, and 6 
D)  2, 4, 5, and 6

Question 17

Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis.

Accepted Answer

A) True 
 B)False

Question 18

Money eliminates the need for a coincidence of wants in trading primarily through its role as a:

Accepted Answer

A)  Unit of account 
B)  Medium of exchange 
C)  Store of value 
D)  Medium of deferred payment 
A)  Unit of account 
B)  Medium of exchange 
C)  Store of value 
D)  Medium of deferred payment

Question 19

The functions of money are to serve as a:

Accepted Answer

A)  Resource allocator, method for accounting, and means of income distribution 
B)  Unit of account, store of value, and medium of exchange 
C)  Determinant of consumption, investment, and government spending 
D)  Factor of production, exchange, and aggregate supply 
A)  Resource allocator, method for accounting, and means of income distribution 
B)  Unit of account, store of value, and medium of exchange 
C)  Determinant of consumption, investment, and government spending 
D)  Factor of production, exchange, and aggregate supply

Question 20

Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is:

Accepted Answer

A)  A way of reducing risk though diversification 
B)  Well-understood by financial analysts and managers who engaged in it 
C)  Considered shady by legitimate financial institutions 
D)  Still only a minor portion of the modern financial system 
A)  A way of reducing risk though diversification 
B)  Well-understood by financial analysts and managers who engaged in it 
C)  Considered shady by legitimate financial institutions 
D)  Still only a minor portion of the modern financial system

The so-called near-monies have the following characteristics, except:

Money in the U.S. is essentially debt of:

"Thrifts" refer to the following institutions, except:

People can generally get the following items at their commercial banks, except:

If the price index rises from 100 to 130, then the purchasing power of the dollar will fall by about:

When there is inflation in the economy, it implies that the:

A few years prior to the Financial Crisis of 2007-2008, many people were getting approved for mortgage loans even without proper documentation or credit checks.

Which of the following is not true about the Federal Reserve banks?

Which group is responsible for the policy decision of changing the money supply?

The currency held in the vaults of commercial banks is included in the money supply M1.

How many members can serve on the Board of Governors of the Federal Reserve System?

The general public can open deposit accounts at their district's Federal Reserve Bank.

The Federal Reserve System performs many functions but its most important one is:

Refer to the table above. The size of the M1 money supply is:

Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis.

Money eliminates the need for a coincidence of wants in trading primarily through its role as a:

The functions of money are to serve as a:

Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

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

Fiscal Policy, Deficits, and Debt

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

Filters

Exam 14: Money, Banking, and Financial Institutions

The so-called near-monies have the following characteristics, except:

Money in the U.S. is essentially debt of:

"Thrifts" refer to the following institutions, except:

People can generally get the following items at their commercial banks, except:

If the price index rises from 100 to 130, then the purchasing power of the dollar will fall by about:

When there is inflation in the economy, it implies that the:

A few years prior to the Financial Crisis of 2007-2008, many people were getting approved for mortgage loans even without proper documentation or credit checks.

Which of the following is not true about the Federal Reserve banks?

Which group is responsible for the policy decision of changing the money supply?

The currency held in the vaults of commercial banks is included in the money supply M1.

How many members can serve on the Board of Governors of the Federal Reserve System?

The general public can open deposit accounts at their district's Federal Reserve Bank.

The Federal Reserve System performs many functions but its most important one is:

Refer to the table above. The size of the M1 money supply is:

Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis.

Money eliminates the need for a coincidence of wants in trading primarily through its role as a:

The functions of money are to serve as a:

Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

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

Fiscal Policy, Deficits, and Debt

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

Filters