Please answer all questions.
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1 | |
A nonbanking institution that manages investment pools set aside by individuals, corporations, unions, and some nonprofit organizations to provide retirement income for members is called a(n) |
| | A) | money market fund. |
| | B) | pension fund. |
| | C) | insurance company. |
| | D) | brokerage firm. |
| | E) | none of the above. |
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2 | |
The Federal Reserve System is responsible for |
| | A) | regulating banks and financial institutions. |
| | B) | creating a stable economic environment. |
| | C) | managing regional and national check clearing. |
| | D) | monetary policy. |
| | E) | all of the above. |
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3 | |
Which of the following is probably the most familiar form of electronic banking? |
| | A) | ATM |
| | B) | debit card |
| | C) | credit card |
| | D) | POS system |
| | E) | ACHs |
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4 | |
In general, the shorter the term of a certificate of deposit, the |
| | A) | less safe it is. |
| | B) | higher its interest rate. |
| | C) | lower its value. |
| | D) | lower its interest rate. |
| | E) | higher its inflation rate. |
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5 | |
The independent government agency that regulates the nation's banking and financial industry is called the |
| | A) | Federal Reserve System. |
| | B) | Federal Depository Agency. |
| | C) | s Bank. |
| | D) | First Bank of America. |
| | E) | Federal Trade Commission. |
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6 | |
When the Fed decreases the reserve requirement, it |
| | A) | decreases the money supply. |
| | B) | increases the money supply. |
| | C) | increases the amount of insurance for accounts. |
| | D) | clears all of the checks in the system immediately. |
| | E) | none of the above. |
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7 | |
Demand deposits are more commonly known as |
| | A) | time deposit. |
| | B) | mutual fund. |
| | C) | money market account. |
| | D) | checking accounts. |
| | E) | cash account. |
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8 | |
Assets that are easily turned into cash but cannot be used directly as a medium of exchange are called |
| | A) | government gold reserves. |
| | B) | colored rocks. |
| | C) | fiat money |
| | D) | near money. |
| | E) | gold standards. |
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9 | |
Because money acts as a common denominator that allows people to compare the different goods and services that can be consumed on a particular income level, it functions as a(n) |
| | A) | economic trade. |
| | B) | medium of exchange. |
| | C) | store of value. |
| | D) | measure of value. |
| | E) | divisible currency. |
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10 | |
Which of the following is a type of pension fund? |
| | A) | savings and loan accounts |
| | B) | mutual funds |
| | C) | insurance company life insurance plans |
| | D) | Social Security |
| | E) | All of the above are types of pension funds |
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11 | |
A certificate of deposit |
| | A) | is safer than cash for paying bills. |
| | B) | is a demand deposit. |
| | C) | is sometimes called a NOW account. |
| | D) | earns a guaranteed rate of interest. |
| | E) | all of the above are correct. |
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12 | |
Store of value, medium of exchange, and measure of value are all functions of |
| | A) | the barter system. |
| | B) | finance. |
| | C) | money. |
| | D) | bank drafts. |
| | E) | credit cards. |
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13 | |
People trust the value of money and businesses are willing to receive it as a payment for goods and services. This statement refers to which characteristic of money? |
| | A) | divisibility |
| | B) | acceptability |
| | C) | portability |
| | D) | durability |
| | E) | stability |
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14 | |
The organization created by the federal government to resolve the S&L crisis by managing the bailout and sell-off of failed thrifts was called the |
| | A) | Federal Trade Commission. |
| | B) | Federal Reserve Board. |
| | C) | IRA. |
| | D) | Resolution Trust Corporation. |
| | E) | Commerce Banking Trust Corporation. |
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15 | |
Commercial banks offer which of the following? |
| | A) | credit cards. |
| | B) | consumer loans. |
| | C) | safe-deposit boxes. |
| | D) | certificates of deposit. |
| | E) | all of the above. |
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16 | |
The primary business of mutual savings banks is |
| | A) | making loans to large corporations. |
| | B) | providing a safe place for savings of particular groups. |
| | C) | loans to foreign governments. |
| | D) | insuring deposits. |
| | E) | selling life insurance. |
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17 | |
Which of the following is often called a thrift? |
| | A) | commercial bank |
| | B) | credit union |
| | C) | loan association |
| | D) | mutual bank |
| | E) | pension fund |
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18 | |
Which of the following results in a direct, immediate, electronic payment from the cardholder's checking account to a merchant? |
| | A) | credit card |
| | B) | money order |
| | C) | s check |
| | D) | debit card |
| | E) | ATM card |
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19 | |
When the Federal Reserve sells securities, it |
| | A) | decreases the money supply. |
| | B) | increases the money supply. |
| | C) | increases the amount of insurance for accounts. |
| | D) | clears all of the checks in the system immediately. |
| | E) | keeps the money supply the same. |
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20 | |
The financial institution that relies mainly on checking and savings accounts as their major source of funds is the |
| | A) | commercial bank. |
| | B) | credit union. |
| | C) | savings and loan association. |
| | D) | mutual bank. |
| | E) | insurance company. |
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2002 McGraw-Hill Higher Education