True or False Quiz

Please answer all questions.


1	Credit cards allow little flexibility in paying off purchases.
		A)	True
		B)	False


2	The Federal Trade Commission regulates financial institutions.
		A)	True
		B)	False


3	There are several types of checking accounts.
		A)	True
		B)	False


4	Money has only two important functions: as a medium of exchange and a measure of value.
		A)	True
		B)	False


5	Money market accounts are savings accounts that guarantee a depositor a set interest rate over a specified interval of time as long as the funds are not withdrawn prematurely.
		A)	True
		B)	False


6	The FDIC insures individual bank accounts.
		A)	True
		B)	False


7	Commercial banks rely mainly on checking and savings accounts as their major source of funds.
		A)	True
		B)	False


8	When the Fed lowers the discount rate, it is harder to borrow money.
		A)	True
		B)	False


9	Nonbank financial institutions offer some financial services but do not accept deposits.
		A)	True
		B)	False


10	The Fed is an independent agency of the federal government.
		A)	True
		B)	False


11	Credit unions offer a variety of services, particularly commercial loans and checking accounts.
		A)	True
		B)	False


12	Certificates of deposit spread the risk of investing across many securities.
		A)	True
		B)	False


13	Automated clearinghouses (ACHs) permit payments such as deposits or withdrawals to be made to and from a bank account by magnetic computer tape.
		A)	True
		B)	False


14	When the Fed buys government securities, it increases the money in circulation.
		A)	True
		B)	False


15	Fiat money is not readily convertible to gold.
		A)	True
		B)	False


16	The most important characteristic of money is its divisibility.
		A)	True
		B)	False


17	A credit union is owned and controlled by its depositors.
		A)	True
		B)	False


18	The Fed is responsible for supervising the federal insurance funds that protect the deposits of member institutions.
		A)	True
		B)	False


19	Finance companies offer short-term loans at substantially higher rates of interest than banks.
		A)	True
		B)	False


20	Funds in a demand deposit can be withdrawn without an advance notice.
		A)	True
		B)	False

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