FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

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

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

True/False

Review LaterAdd Note

Review Later

Next month,Commerce Bank plans to increase the amount of new loans it makes.As a member bank of the Federal Reserve,Commerce can borrow from the Fed.Commerce will charge the customer an interest amount greater than the discount rate.

A) True
B) False

Correct Answer

verified

Show Answer

Question 62

True/False

Review LaterAdd Note

Review Later

Last week Dave was looking for a place to deposit a $30,000 inheritance from his Great Aunt Martha who passed away three months ago.Although he does not plan to spend his money frivolously,he will need part of the funds from time to time for his college education - something he promised Great Aunt Martha he would achieve.After speaking with several sales consultants in banking and nonbank institutions,he likes the fact that he can open a stock brokerage account and a money-market account at Goodman Stacks Investment Company a nonbank company),and will be issued checks for paying bills.You remind him that with the recent mergers between banking and nonbank institutions,he may be able to find a company that provides both)the convenience of banking services ATM,cash availability)and low risk/high risk securities products.

A) True
B) False

Correct Answer

verified

Show Answer

Question 63

True/False

Review LaterAdd Note

The Fed commonly buys or sells U.S.government securities to regulate the money supply.

__________ occurs when goods are traded directly for other goods.

Alan works as a loan officer for a major U.S.commercial bank,specializing in international loans.When considering loans to governments and businesses in other nations,Alan:

Because they charge higher interest rates,commercial and consumer finance companies often fail to attract borrowers.

Credit cards and debit cards eliminate the paper handling processes of using checks.

Cory worries that his $7,537 in a checking account at the Lottadoe National Bank could be lost if the bank fails.Lottadoe is a FDIC Federal Deposit Insurance Corporation)member bank,which insures Cory's account up to $250,000.

A rapid increase in the money supply may lead to an) :

The World Bank provides funding for:

The wave of bank failures during the Great Depression prompted the government to establish federal deposit insurance to protect the public from bank failures.

Both checks and debit cards will immediately transfers funds from the customer's account to the seller's account.

A __________ is a profit-seeking organization that receives deposits from individuals and corporations and uses some of these deposits to make loans.

M-2 represents the most commonly used definition of the money supply.

Some automatic teller machines ATMs)allow users to pick up concert tickets and download music files.

Commercial banks,savings and loan associations,and credit unions:

Today's consumers have fewer options and less flexibility as a result of increased regulation of the banking industry.

The ability to access funds without a penalty helps to explain why certificates of deposit CDs)have gained popularity among conservative investors and savers.

The ______ definition of money supply includes money that is quickly and easily accessed.

Nonbanks accept deposits,but do not offer lending services,brokerage services,or insurance services.