Question 1

While Federal Reserve actions impact domestic investors,they have little effect on decisions made by international investors.

Accepted Answer

A) True 
 B)False

Question 2

A central bank allows individual banks to deposit and to borrow funds.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  e-cash
B)  M-3
C)  M-2
D)  M-1E) B) and C)
F) A) and D)

Question 4

When the value of the dollar falls,foreign goods become less expensive for American consumers.

Accepted Answer

A) True 
 B)False

Question 5

Smart cards contain a microprocessor chip that stores information about the user,such as drivers' license data and bank balance.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following reduces the costs involved with the Federal Reserve's check-clearing role?

Accepted Answer

A)  A decrease in the use of the barter system
B)  A reduction in the Fed's discount rate
C)  An increase in the reserve requirement
D)  An increase in the use of debit cardsE) A) and B)
F) A) and C)

Question 7

Describe and compare the three major types of organizations that make up the U.S.banking system: commercial banks,savings and loan associations,and credit unions.

Accepted Answer

The U.S.banking system consists primaril...

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  credit union
B)  Federal Reserve Bank
C)  commercial bank
D)  consumer finance companyE) A) and B)
F) B) and C)

Question 10

Prior to the Civil War,the United States had two unsuccessful attempts at a central bank.

Accepted Answer

A) True 
 B)False

Question 11

As a response to the bank failures of the _______,a system of federal deposit insurance was established to strengthen the banking system.

Accepted Answer

A)  Civil War
B)  wildcat banking crisis of the 1880s
C)  Great Depression
D)  banking crisis of the early 1980sE) A) and B)
F) B) and C)

Question 12

The redesign and new colors added to U.S.paper money is intended to:

Accepted Answer

A)  make the currency more difficult to counterfeit.
B)  increase the use of the barter system.
C)  improve the durability of our monetary system.
D)  increase the portability of our money.E) B) and D)
F) B) and C)

Question 13

Internet banks offer customers better interest rates and lower fees because these businesses avoid the costs of constructing and maintaining a bank building.

Accepted Answer

A) True 
 B)False

Question 14

A series of bank failures and a cash shortage in 1907 led to the establishment of the Federal Reserve System in 1913.

Accepted Answer

A) True 
 B)False

Question 15

A demand deposit is the technical name for a checking account.

Accepted Answer

A) True 
 B)False

Question 16

___________ replace the typical magnetic strip on a credit or debit card with a microprocessor.

Accepted Answer

A)  Smart cards
B)  Direct deposit cards
C)  E-cards
D)  Check conversionsE) B) and D)
F) C) and D)

Question 17

In the 1930s,during the Great Depression,the government started an insurance program to protect the public from bank failures.

Accepted Answer

A) True 
 B)False

Question 18

The government is concerned about inflationary pressures that seem to be building within the nation.Restricting the growth of money supply provides an effective strategy to reduce these inflationary pressures.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a bank service provided to help companies conduct business in other countries?

Accepted Answer

A)  Transaction letters
B)  Certificates of deposit
C)  Banker's depositories
D)  Currency exchangeE) A) and C)
F) A) and D)

Question 20

Many employers offer direct deposit,as a convenient and cost savings method of distributing employee pay each month.

Accepted Answer

A) True 
 B)False

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

A series of bank failures and a cash shortage in 1907 led to the establishment of the Federal Reserve System in 1913.

Correct AnswerverifiedShow Answer

Many employers offer direct deposit,as a convenient and cost savings method of distributing employee pay each month.

Correct AnswerverifiedShow Answer

Which of the following reduces the costs involved with the Federal Reserve's check-clearing role?

Correct AnswerverifiedShow Answer

When the value of the dollar falls,foreign goods become less expensive for American consumers.

Correct AnswerverifiedShow Answer

Internet banks offer customers better interest rates and lower fees because these businesses avoid the costs of constructing and maintaining a bank building.

Correct AnswerverifiedShow Answer

While Federal Reserve actions impact domestic investors,they have little effect on decisions made by international investors.

Correct AnswerverifiedShow Answer

The redesign and new colors added to U.S.paper money is intended to:

Correct AnswerverifiedShow Answer

Describe and compare the three major types of organizations that make up the U.S.banking system: commercial banks,savings and loan associations,and credit unions.

Correct AnswerverifiedThe U.S.banking system consists primaril...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Smart cards contain a microprocessor chip that stores information about the user,such as drivers' license data and bank balance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is a bank service provided to help companies conduct business in other countries?

Correct AnswerverifiedShow Answer

The government is concerned about inflationary pressures that seem to be building within the nation.Restricting the growth of money supply provides an effective strategy to reduce these inflationary pressures.

Correct AnswerverifiedShow Answer

As a response to the bank failures of the _______,a system of federal deposit insurance was established to strengthen the banking system.

Correct AnswerverifiedShow Answer

In the 1930s,during the Great Depression,the government started an insurance program to protect the public from bank failures.

Correct AnswerverifiedShow Answer

___________ replace the typical magnetic strip on a credit or debit card with a microprocessor.

Correct AnswerverifiedShow Answer

A central bank allows individual banks to deposit and to borrow funds.

Correct AnswerverifiedShow Answer

A demand deposit is the technical name for a checking account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Prior to the Civil War,the United States had two unsuccessful attempts at a central bank.

Correct AnswerverifiedShow Answer

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The U.S.banking system consists primaril...
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