Question 1

_____ permit payments such as deposits or withdrawals to be made to and from a bank account by magnetic computer tape.

Accepted Answer

A)  Brokerage firms
B)  Investment banks
C)  Bank vaults
D)  Automated teller machines
E)  Automated clearinghousesF) A) and B)
G) B) and E)

Question 2

_____,often called "thrifts," are financial institutions that primarily offer savings accounts and make long-term loans for residential mortgages.

Accepted Answer

A)  Commercial banks
B)  Credit unions
C)  Savings and loan associations
D)  Mutual savings banks
E)  Insurance companiesF) C) and E)
G) B) and E)

Question 3

The _____ repealed the Glass-Stegall Act,putting U.S.commercial banks on the same competitive footing as European banks.

Accepted Answer

A)  Sarbanes-Oxley Act
B)  Celler-Kefauver Act
C)  Dodd-Frank Act
D)  Credit CARD Act
E)  Gramm-Leach-Bliley ActF) None of the above
G) A) and B)

Question 4

_____ refers to companies performing banking functions of some sort that are not regulated by banking regulators.

Accepted Answer

A)  Online banking
B)  Digital banking
C)  Shadow banking
D)  Mobile banking
E)  Traditional bankingF) B) and C)
G) C) and D)

Question 5

When a person pays $23,000 to buy a car,money primarily functions as a:

Accepted Answer

A)  means of savings.
B)  store of value.
C)  measure of value.
D)  treasury bill.
E)  counterfeit deterrent.F) A) and B)
G) All of the above

Question 6

When money serves as a way to accumulate wealth,money primarily functions as a:

Accepted Answer

A)  yardstick of value.
B)  store of value.
C)  measure of value.
D)  medium of exchange.
E)  counterfeit deterrent.F) A) and B)
G) A) and C)

Question 7

_____ 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accounts that guarantee a depositor a set interest rate over a specified interval of time as long as the funds are not withdrawn prematurely.

Accepted Answer

A)  Certificates of deposits
B)  Checking accounts
C)  Money market accounts
D)  Demand deposits
E)  Negotiable Order of Withdrawal accountsF) B) and D)
G) C) and E)

Question 8

Which of the following is a type of mutual fund?

Accepted Answer

A)  Individual retirement account
B)  Corporate insurance plan
C)  Money market fund
D)  Social Security
E)  Roth individual retirement accountF) B) and E)
G) B) and D)

Question 9

The major difference between banks and credit unions is that:

Accepted Answer

A)  credit unions have higher default rates than banks.
B)  banks distribute their profits to depositors.
C)  credit unions have higher loan rates and lower interest rates than banks.
D)  bank depositors get to vote for the bank directors.
E)  credit unions are owned and controlled by their depositors.F) A) and D)
G) None of the above

Question 10

U.S.money includes subtle colors in addition to the traditional green,as well as enhanced security features,such as a watermark,security thread,and color-shifting ink.Which of the following characteristics of money is being protected by these measures?

Accepted Answer

A)  Acceptability
B)  Inimitability
C)  Divisibility
D)  Stability
E)  PortabilityF) All of the above
G) B) and E)

Question 11

Ryan traded his tablet PC for a cellphone.Since both were of the same value,there was no exchange of money.Which of the following concepts does this scenario illustrate?

Accepted Answer

A)  Discounting
B)  Checking
C)  Bartering
D)  Accruing
E)  DevaluingF) B) and C)
G) A) and E)

Question 12

Which of the following acts limited the ability of credit card issuers to raise rates,limited credit to young adults,and gave people more time to pay bills?

Accepted Answer

A)  The Dodd-Frank Act
B)  The Gramm-Leach-Bliley Act
C)  The Troubled Asset Relief Program Act
D)  The Financial Services Modification Act
E)  The Credit CARD ActF) B) and C)
G) C) and E)

Question 13

Which of the following effects is seen on the money supply and the economy when the Federal Reserve Board restricts credit controls?

Accepted Answer

A)  More people are encouraged to make major purchases,increasing economic activity.
B)  Banks make fewer loans; the money supply declines; economic activity slows down.
C)  Banks make more loans; the money supply increases; economic activity increases.
D)  Interest rates increase; the money supply decreases; economic activity slows down.
E)  People are discouraged from making major purchases,decreasing economic activity.F) D) and E)
G) A) and E)

Question 14

Money must be very difficult to counterfeit; it means that it should be hard to:

Accepted Answer

A)  convert into another form of currency.
B)  divide into smaller units.
C)  store as assets.
D)  duplicate illegally.
E)  use for cumbersome bartering.F) C) and E)
G) D) and E)

Question 15

_____ charge a penalty for withdrawing money prematurely.

Accepted Answer

A)  Negotiable Order of Withdrawal accounts
B)  Checking accounts
C)  Money market accounts
D)  Demand deposits
E)  Certificates of depositF) A) and B)
G) B) and D)

Question 16

Finance companies:

Accepted Answer

A)  offer short-term loans.
B)  charge lower interest rates than banks.
C)  do not require collateral.
D)  do not make loans to individuals.
E)  are banking institutions.F) A) and E)
G) A) and D)

Question 17

The _____ is the guardian of the American financial system.

Accepted Answer

A)  Federal Savings and Loan Insurance Corporation
B)  Federal Deposit Insurance Corporation
C)  New York Federal Reserve Bank
D)  Federal Reserve Board
E)  National Credit Union AdministrationF) B) and D)
G) A) and C)

Question 18

For money to function as a medium of exchange,it must be easily moved from one location to the next.Which of the following characteristics of money does this statement reflect?

Accepted Answer

A)  Divisibility
B)  Durability
C)  Acceptability
D)  Stability
E)  PortabilityF) All of the above
G) A) and B)

Question 19

A person swaps a bag of fruits for some meat.In this case,money functions as a:

Accepted Answer

A)  standard of value.
B)  store of value.
C)  measure of value.
D)  medium of exchange.
E)  counterfeit deterrent.F) A) and D)
G) C) and D)

Question 20

When inflation is very high,money loses its _____.

Accepted Answer

A)  stability
B)  portability
C)  durability
D)  divisibility
E)  acceptabilityF) A) and B)
G) D) and E)

Exam 15: Money and the Financial System

_____,often called "thrifts," are financial institutions that primarily offer savings accounts and make long-term loans for residential mortgages.

Correct AnswerverifiedShow Answer

The _____ is the guardian of the American financial system.

Correct AnswerverifiedShow Answer

Money must be very difficult to counterfeit; it means that it should be hard to:

Correct AnswerverifiedShow Answer

Which of the following effects is seen on the money supply and the economy when the Federal Reserve Board restricts credit controls?

Correct AnswerverifiedShow Answer

When a person pays $23,000 to buy a car,money primarily functions as a:

Correct AnswerverifiedShow Answer

The _____ repealed the Glass-Stegall Act,putting U.S.commercial banks on the same competitive footing as European banks.

Correct AnswerverifiedShow Answer

The major difference between banks and credit unions is that:

Correct AnswerverifiedShow Answer

For money to function as a medium of exchange,it must be easily moved from one location to the next.Which of the following characteristics of money does this statement reflect?

Correct AnswerverifiedShow Answer

A person swaps a bag of fruits for some meat.In this case,money functions as a:

Correct AnswerverifiedShow Answer

When money serves as a way to accumulate wealth,money primarily functions as a:

Correct AnswerverifiedShow Answer

Which of the following acts limited the ability of credit card issuers to raise rates,limited credit to young adults,and gave people more time to pay bills?

Correct AnswerverifiedShow Answer

When inflation is very high,money loses its _____.

Correct AnswerverifiedShow Answer

_____ 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.

Correct AnswerverifiedShow Answer

Finance companies:

Correct AnswerverifiedShow Answer

_____ refers to companies performing banking functions of some sort that are not regulated by banking regulators.

Correct AnswerverifiedShow Answer

_____ permit payments such as deposits or withdrawals to be made to and from a bank account by magnetic computer tape.

Correct AnswerverifiedShow Answer

U.S.money includes subtle colors in addition to the traditional green,as well as enhanced security features,such as a watermark,security thread,and color-shifting ink.Which of the following characteristics of money is being protected by these measures?

Correct AnswerverifiedShow Answer

_____ charge a penalty for withdrawing money prematurely.

Correct AnswerverifiedShow Answer

Ryan traded his tablet PC for a cellphone.Since both were of the same value,there was no exchange of money.Which of the following concepts does this scenario illustrate?

Correct AnswerverifiedShow Answer

Which of the following is a type of mutual fund?

Correct AnswerverifiedShow Answer

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