Question 1

The three basic tools the Fed uses to manage the money supply are reserve requirements,open-market operations,and the discount rate.

Accepted Answer

A) True 
 B)False

Question 2

The Fed Chairman is in control of:

Accepted Answer

A)  the world's money supply.
B)  the U.S.money supply.
C)  fiscal policy.
D)  the IMF.E) A) and D)
F) B) and C)

Question 3

Alexander Hamilton persuaded Congress to create a central bank.

Accepted Answer

A) True 
 B)False

Question 4

Under the Federal Reserve Act of 1913:

Accepted Answer

A)  membership in the Federal Reserve System was made voluntary for all banks.
B)  federally chartered banks were required to join the Federal Reserve System.
C)  membership in the Federal Reserve System was required of all banks that had deposits of more than $1 million.
D)  all banks were required to hold reserves equal to at least 50 percent of their deposits.E) B) and D)
F) None of the above

Question 5

Cory worries that his $7,537 in a checking account at the Lottadoe National Bank could be lost if the bank fails.He should relax because his account is fully insured by the FDIC (Federal Deposit Insurance Corporation).

Accepted Answer

A) True 
 B)False

Question 6

According to the Spotlight on Small Business box in Chapter 20,angel investors usually invest in high-growth companies in fields like technology and biotech rather than local companies like restaurants and roofers.

Accepted Answer

A) True 
 B)False

Question 7

The federal funds rate is the interest rate that banks charge each other.

Accepted Answer

A) True 
 B)False

Question 8

The Federal Reserve establishes the tax policies of the U.S.

Accepted Answer

A) True 
 B)False

Question 9

A letter of credit represents a promise that a bank will disburse a specified amount of funds at a particular time if certain conditions are met.

Accepted Answer

A) True 
 B)False

Question 10

The M-3 includes M-1 money,but not M-2 money.

Accepted Answer

A) True 
 B)False

Question 11

Trading internationally by using money appears easy and almost effortless,but the fact is there is a very complex banking system that makes it happen.

Accepted Answer

A) True 
 B)False

Question 12

President Dude,the leader of the island nation of Jaylo,refuses to raise taxes,but wants to expand many government services and increase the size of the Jaylo armed forces.He plans to pay for all of the desired expenditures by printing more money.If President Dude carries out his plan by rapidly increasing the supply of money,Jaylo will likely experience:

Accepted Answer

A)  a severe recession.
B)  reduced private sector spending.
C)  widespread surpluses of goods and services.
D)  an increase in the rate of inflation.E) A) and B)
F) None of the above

Question 13

The strength of the U.S.money system rests on the silver content of the coins.

Accepted Answer

A) True 
 B)False

Question 14

Early in our nation's history,people generally accepted the importance of a central bank authority.

Accepted Answer

A) True 
 B)False

Question 15

Originally,savings and loan associations:

Accepted Answer

A)  offered brokerage services to small investors.
B)  promoted consumer thrift and home ownership.
C)  acted as a fiscal agent for the federal government,and issued and redeemed U.S.savings bonds.
D)  handled the overflow of business from national and state banks.E) B) and C)
F) C) and D)

Question 16

The International Monetary Fund assists with the smooth flow of money among nations.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Open-market operations involve:

Accepted Answer

A)  monitoring the reserve requirement.
B)  the buying and selling of bonds.
C)  increasing and decreasing interest rates.
D)  participating with the IMF.E) A) and B)
F) C) and D)

Question 19

The Federal Reserve assists in the processing of checks between banks.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

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

Cory worries that his $7,537 in a checking account at the Lottadoe National Bank could be lost if the bank fails.He should relax because his account is fully insured by the FDIC (Federal Deposit Insurance Corporation).

Correct Answer
verified

The Federal Reserve establishes the tax policies of the U.S.

Correct Answer
verified

A letter of credit represents a promise that a bank will disburse a specified amount of funds at a particular time if certain conditions are met.

Correct Answer
verified

Under the Federal Reserve Act of 1913:

Correct Answer
verified

Open-market operations involve:

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Originally,savings and loan associations:

Correct Answer
verified

The M-3 includes M-1 money,but not M-2 money.

Correct Answer
verified

The strength of the U.S.money system rests on the silver content of the coins.

Correct Answer
verified

The federal funds rate is the interest rate that banks charge each other.

Correct Answer
verified

Trading internationally by using money appears easy and almost effortless,but the fact is there is a very complex banking system that makes it happen.

Correct Answer
verified

The Fed Chairman is in control of:

Correct Answer
verified

The International Monetary Fund assists with the smooth flow of money among nations.

Correct Answer
verified

The three basic tools the Fed uses to manage the money supply are reserve requirements,open-market operations,and the discount rate.

Correct Answer
verified

Alexander Hamilton persuaded Congress to create a central bank.

Correct Answer
verified

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

Correct Answer
verified

According to the Spotlight on Small Business box in Chapter 20,angel investors usually invest in high-growth companies in fields like technology and biotech rather than local companies like restaurants and roofers.

Correct Answer
verified

Early in our nation's history,people generally accepted the importance of a central bank authority.

Correct Answer
verified

The Federal Reserve assists in the processing of checks between banks.

Correct Answer
verified

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

Cory worries that his $7,537 in a checking account at the Lottadoe National Bank could be lost if the bank fails.He should relax because his account is fully insured by the FDIC (Federal Deposit Insurance Corporation).

Correct AnswerverifiedShow Answer

The Federal Reserve establishes the tax policies of the U.S.

Correct AnswerverifiedShow Answer

A letter of credit represents a promise that a bank will disburse a specified amount of funds at a particular time if certain conditions are met.

Correct AnswerverifiedShow Answer

Under the Federal Reserve Act of 1913:

Correct AnswerverifiedShow Answer

Open-market operations involve:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Originally,savings and loan associations:

Correct AnswerverifiedShow Answer

The M-3 includes M-1 money,but not M-2 money.

Correct AnswerverifiedShow Answer

The strength of the U.S.money system rests on the silver content of the coins.

Correct AnswerverifiedShow Answer

The federal funds rate is the interest rate that banks charge each other.

Correct AnswerverifiedShow Answer

Trading internationally by using money appears easy and almost effortless,but the fact is there is a very complex banking system that makes it happen.

Correct AnswerverifiedShow Answer

The Fed Chairman is in control of:

Correct AnswerverifiedShow Answer

The International Monetary Fund assists with the smooth flow of money among nations.

Correct AnswerverifiedShow Answer

The three basic tools the Fed uses to manage the money supply are reserve requirements,open-market operations,and the discount rate.

Correct AnswerverifiedShow Answer

Alexander Hamilton persuaded Congress to create a central bank.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to the Spotlight on Small Business box in Chapter 20,angel investors usually invest in high-growth companies in fields like technology and biotech rather than local companies like restaurants and roofers.

Correct AnswerverifiedShow Answer

Early in our nation's history,people generally accepted the importance of a central bank authority.

Correct AnswerverifiedShow Answer

The Federal Reserve assists in the processing of checks between banks.

Correct AnswerverifiedShow Answer

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