Question 1

The National Credit Union Administration provides coverage up to $250,000 per individual depositor at each credit union.

Accepted Answer

A) True 
 B)False

Question 2

Changes in the money supply produce little or no change in inflation,employment and economic growth.

Accepted Answer

A) True 
 B)False

Question 3

Payroll debit cards:

Accepted Answer

A)  are protected if lost or stolen.
B)  have limited use because they can only act as a credit card,and the recipient does not have access to cash.
C)  must go through the Federal Reserve's Automated Clearing House system.
D)  can be issued to persons without bank accounts who can use it to pay bills online,or access cash from an ATM machine.E) A) and B)
F) None of the above

Question 4

The community college where Jake works requires all employees to contribute to a pension fund.At this time,he is not too worried about the safety of this contribution because:

Accepted Answer

A)  the pensions fund's investments are always backed by the full faith and credit of the U.S.government.
B)  pension funds are provided by nonbanks so they are not going to take this money and lend it to others.
C)  he is considered a state employee,and as such,he is protected from this fund going bankrupt.
D)  pension funds usually make conservative investments.E) None of the above
F) A) and D)

Question 5

Hottie Potatee,a popular chain of urban potato-bars buys its multi-processing ovens from a German company.With its current push for expansion,the company has signed a ___________ with Across-the-Pond,Inc. ,Global Banking Company,to issue payment to the German manufacturer,once the ovens are installed and Hottie Potatee is assured that the ovens meet its quality assurance standards.

Accepted Answer

A)  banker's coverage
B)  smart card
C)  actuarial front
D)  letter of creditE) B) and D)
F) B) and C)

Question 6

Shana works as an investment specialist for the Teamsters Union Central States Pension Fund.Her job involves deciding how to invest the contributions paid into the fund.Which of the following statements about Shana's job are true?

Accepted Answer

A)  She works for a bank.
B)  She will probably invest most of the pension's funds in safe corporate stocks and other conservative investments such as government securities.
C)  In order to qualify for maximum tax benefits,the funds Shana invests all must be contributed by the companies who employ members of the Teamsters Union,rather than by the union members themselves.
D)  The purpose of the investments Shana is making is to increase the current pay of union members.E) A) and B)
F) None of the above

Question 7

The electronic transfer of money increases the Federal Reserve's check-clearing operations.

Accepted Answer

A) True 
 B)False

Question 8

The board of governors of the Federal Reserve System determines:

Accepted Answer

A)  exchange rates.
B)  U.S.monetary policy.
C)  and monitors the inflows and outflows of gold reserves to ensure a stable money supply.
D)  how much money the U.S.will loan to foreign governments.E) B) and D)
F) B) and C) B

Question 9

When traveling in other countries,tourists can use their MasterCard or Visa bankcards to obtain foreign currencies at ATMs.

Accepted Answer

A) True 
 B)False  True

Question 10

To decrease the money supply,the Federal Reserve sells U.S.government bonds in open-market operations.

Accepted Answer

A) True 
 B)False

Question 11

Great news! The Fed just announced that the discount rate will rise by as much as 1% over the next three months.This will make it easier for Ben,the owner of a laser engraving business,to borrow money for that new piece of equipment he needs.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements best summarizes the difference between M-1 and M-2?

Accepted Answer

A)  The M-1 definition of the money supply considers only domestic currencies while the M-2 definition includes foreign currencies.
B)  The M-1 definition consists of "hard" currencies which are backed by gold and silver,while M-2 consists of "soft" currencies which are not backed by gold and silver.
C)  The M-2 definition includes everything in the M-1 definition,plus additional components such as money in savings accounts,money market accounts,and certificates of deposit.
D)  The M-1 money supply consists only of the currency coins and paper money) that circulates in our economy,while the M-2 includes traveler's checks and funds in demand deposits.E) A) and C)
F) B) and D)

Question 13

Historically,there was ________ a central bank in the U.S.

Accepted Answer

A)  very little resistance to
B)  resistance to
C)  insufficient funding of
D)  disinterest inE) A) and C)
F) All of the above

Question 14

________ involves the Fed buying and selling U.S.government securities to increase or decrease the money supply.

Accepted Answer

A)  Discounting
B)  Reserve requirements
C)  Deficit funding
D)  Open-market operationsE) A) and B)
F) A) and C)

Question 15

GO-tags,a new product introduced by First Data,Inc.sports a small chip with a radio-transmitter that permits the user to tap a small card against a machine and transfer funds from the card to the vendor's account.

Accepted Answer

A) True 
 B)False  True

Question 16

Early settlers of the New World relied heavily on barter because:

Accepted Answer

A)  they found barter more convenient than the use of money.
B)  strict laws limited the number of coins that could be brought into the colonies.
C)  money had not yet evolved.
D)  they wanted to protest against British control of the banking system.E) A) and B)
F) C) and D)

Question 17

Existing regulations prohibit Internet banking activities unless the bank also operates a traditional brick-and-mortar facility.

Accepted Answer

A) True 
 B)False

Question 18

The President of the U.S appoints the members of the Federal Reserve's board of governors.

Accepted Answer

A) True 
 B)False

Question 19

Andrea has three types of deposits at her credit union.She has a checking account in her own name worth $32,000,a joint savings account with her husband,which currently holds $95,000,and an IRA account worth $125,449.Her deposits are at risk because they exceed the $250,000 limit on insurance coverage by NCU
A.

Accepted Answer

A) True 
 B)False

Question 20

Alexander Hamilton persuaded Congress to create a central bank.

Accepted Answer

A) True 
 B)False

Exam 20: Money,financial Institutions,and the Federal Reserve

The National Credit Union Administration provides coverage up to $250,000 per individual depositor at each credit union.

Correct Answer
verified

Changes in the money supply produce little or no change in inflation,employment and economic growth.

Correct Answer
verified

Payroll debit cards:

Correct Answer
verified

The community college where Jake works requires all employees to contribute to a pension fund.At this time,he is not too worried about the safety of this contribution because:

Correct Answer
verified

Correct Answer
verified

Shana works as an investment specialist for the Teamsters Union Central States Pension Fund.Her job involves deciding how to invest the contributions paid into the fund.Which of the following statements about Shana's job are true?

Correct Answer
verified

The electronic transfer of money increases the Federal Reserve's check-clearing operations.

Correct Answer
verified

The board of governors of the Federal Reserve System determines:

Correct Answer
verified
B

When traveling in other countries,tourists can use their MasterCard or Visa bankcards to obtain foreign currencies at ATMs.

Correct Answer
verified
True

To decrease the money supply,the Federal Reserve sells U.S.government bonds in open-market operations.

Correct Answer
verified

Great news! The Fed just announced that the discount rate will rise by as much as 1% over the next three months.This will make it easier for Ben,the owner of a laser engraving business,to borrow money for that new piece of equipment he needs.

Correct Answer
verified

Which of the following statements best summarizes the difference between M-1 and M-2?

Correct Answer
verified

Historically,there was ________ a central bank in the U.S.

Correct Answer
verified

________ involves the Fed buying and selling U.S.government securities to increase or decrease the money supply.

Correct Answer
verified

GO-tags,a new product introduced by First Data,Inc.sports a small chip with a radio-transmitter that permits the user to tap a small card against a machine and transfer funds from the card to the vendor's account.

Correct Answer
verified
True

Early settlers of the New World relied heavily on barter because:

Correct Answer
verified

Existing regulations prohibit Internet banking activities unless the bank also operates a traditional brick-and-mortar facility.

Correct Answer
verified

The President of the U.S appoints the members of the Federal Reserve's board of governors.

Correct Answer
verified

Correct Answer
verified

Alexander Hamilton persuaded Congress to create a central bank.

Correct Answer
verified

Exam 20: Money,financial Institutions,and the Federal Reserve

The National Credit Union Administration provides coverage up to $250,000 per individual depositor at each credit union.

Correct AnswerverifiedShow Answer

Changes in the money supply produce little or no change in inflation,employment and economic growth.

Correct AnswerverifiedShow Answer

Payroll debit cards:

Correct AnswerverifiedShow Answer

The community college where Jake works requires all employees to contribute to a pension fund.At this time,he is not too worried about the safety of this contribution because:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Shana works as an investment specialist for the Teamsters Union Central States Pension Fund.Her job involves deciding how to invest the contributions paid into the fund.Which of the following statements about Shana's job are true?

Correct AnswerverifiedShow Answer

The electronic transfer of money increases the Federal Reserve's check-clearing operations.

Correct AnswerverifiedShow Answer

The board of governors of the Federal Reserve System determines:

Correct AnswerverifiedB

When traveling in other countries,tourists can use their MasterCard or Visa bankcards to obtain foreign currencies at ATMs.

Correct AnswerverifiedTrue

To decrease the money supply,the Federal Reserve sells U.S.government bonds in open-market operations.

Correct AnswerverifiedShow Answer

Great news! The Fed just announced that the discount rate will rise by as much as 1% over the next three months.This will make it easier for Ben,the owner of a laser engraving business,to borrow money for that new piece of equipment he needs.

Correct AnswerverifiedShow Answer

Which of the following statements best summarizes the difference between M-1 and M-2?

Correct AnswerverifiedShow Answer

Historically,there was ________ a central bank in the U.S.

Correct AnswerverifiedShow Answer

________ involves the Fed buying and selling U.S.government securities to increase or decrease the money supply.

Correct AnswerverifiedShow Answer

GO-tags,a new product introduced by First Data,Inc.sports a small chip with a radio-transmitter that permits the user to tap a small card against a machine and transfer funds from the card to the vendor's account.

Correct AnswerverifiedTrue

Early settlers of the New World relied heavily on barter because:

Correct AnswerverifiedShow Answer

Existing regulations prohibit Internet banking activities unless the bank also operates a traditional brick-and-mortar facility.

Correct AnswerverifiedShow Answer

The President of the U.S appoints the members of the Federal Reserve's board of governors.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Alexander Hamilton persuaded Congress to create a central bank.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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True

Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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