Question 1

The Federal Reserve System was designed to prevent a repeat of the 1907 banking crisis.

Accepted Answer

A) True 
 B)False

Question 2

The Federal Deposit Insurance Corporation FDIC) operates as an) :

Accepted Answer

A)  department of the Federal Reserve System and sells insurance to mortgage holders.
B)  independent agency of the U.S.government,and sells insurance to banks.
C)  an arm of the Department of the Treasury.
D)  private nonprofit cooperative operated by member banks,offering insurance premiums for banking clients.E) C) and D)
F) B) and C)

Question 3

The U.S.production of the Sacagawea dollar coins provides greater durability than paper dollar bills.

Accepted Answer

A) True 
 B)False

Question 4

Chad travels extensively for his company.He stays at hotels that provide him with an) ____________ that is imbedded with his personal information as well as a code to unlock his hotel room.

Accepted Answer

A)  smart card
B)  RFID tag
C)  credit card
D)  automatic keyE) None of the above
F) A) and B)

Question 5

Kimberly trades some of her homegrown tomatoes to her neighbor,Ron,for some green peppers fresh from Ron's garden.This type of trade represents an example of:

Accepted Answer

A)  barter.
B)  e-commerce.
C)  direct exchange.
D)  tax avoidance.E) All of the above
F) B) and D)

Question 6

In the early 2000s,banks took the mortgages that they owned,created mortgage-backed securities out of them,and sold them as safe investments.

Accepted Answer

A) True 
 B)False

Question 7

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 8

The U.S.government has done its best to create dollar bills that are easily duplicated.

Accepted Answer

A) True 
 B)False

Question 9

Inflation occurs in an economy with too little money chasing too many goods.

Accepted Answer

A) True 
 B)False

Question 10

Pension funds are monies put aside by corporations,non-profit organizations,or unions to fund the financial needs of their employees,upon retirement.

Accepted Answer

A) True 
 B)False

Question 11

Tim travels extensively on business.Most of the hotels where he stays provide him with a card that unlocks his room.The card is keyed to the particular lock that matches the lock on the assigned room,and also contains information about Tim.The type of card that Tim is using is a smart card.

Accepted Answer

A) True 
 B)False

Question 12

As a response to a rise in savings and loan failures,the federal government no longer insures holders of accounts in savings and loan associations.

Accepted Answer

A) True 
 B)False

Question 13

The FDIC exists to maintain the public's confidence in the banking system.

Accepted Answer

A) True 
 B)False

Question 14

After the bank failures of the Great Depression,the U.S.government formed three organizations: the FDIC Federal Deposit Insurance Corporation);the SAIF Savings Association Insurance Fund);and,NCUA National Credit Union Administration)to restore people's confidence and insure deposits.

Accepted Answer

A) True 
 B)False

Question 15

When the Federal Reserve acts to reduce inflation,they decrease the reserve requirement.

Accepted Answer

A) True 
 B)False

Question 16

Commercial banks attempt to profit by using funds deposited by customers to make interest-bearing loans to borrowers.

Accepted Answer

A) True 
 B)False

Question 17

Compare and contrast the functions of the World Bank and the International Monetary Fund.

Accepted Answer

The World Bank and the International Mon...

Question 18

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 D)
F) All of the above

Question 19

The United States first established a central bank in 1913 by establishing the Federal Reserve System.

Accepted Answer

A) True 
 B)False

Question 20

To stimulate the economy during a recession,the Fed would:

Accepted Answer

A)  cut taxes.
B)  increase the discount rate.
C)  reduce the reserve requirement.
D)  sell government securities.E) C) and D)
F) B) and D)

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

Pension funds are monies put aside by corporations,non-profit organizations,or unions to fund the financial needs of their employees,upon retirement.

Correct AnswerverifiedShow Answer

The Federal Reserve System was designed to prevent a repeat of the 1907 banking crisis.

Correct AnswerverifiedShow Answer

Compare and contrast the functions of the World Bank and the International Monetary Fund.

Correct AnswerverifiedThe World Bank and the International Mon...View AnswerShow Answer

Tim travels extensively on business.Most of the hotels where he stays provide him with a card that unlocks his room.The card is keyed to the particular lock that matches the lock on the assigned room,and also contains information about Tim.The type of card that Tim is using is a smart card.

Correct AnswerverifiedShow Answer

In the early 2000s,banks took the mortgages that they owned,created mortgage-backed securities out of them,and sold them as safe investments.

Correct AnswerverifiedShow Answer

As a response to a rise in savings and loan failures,the federal government no longer insures holders of accounts in savings and loan associations.

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 Federal Deposit Insurance Corporation FDIC) operates as an) :

Correct AnswerverifiedShow Answer

The United States first established a central bank in 1913 by establishing the Federal Reserve System.

Correct AnswerverifiedShow Answer

The U.S.production of the Sacagawea dollar coins provides greater durability than paper dollar bills.

Correct AnswerverifiedShow Answer

Inflation occurs in an economy with too little money chasing too many goods.

Correct AnswerverifiedShow Answer

The FDIC exists to maintain the public's confidence in the banking system.

Correct AnswerverifiedShow Answer

Originally,savings and loan associations:

Correct AnswerverifiedShow Answer

When the Federal Reserve acts to reduce inflation,they decrease the reserve requirement.

Correct AnswerverifiedShow Answer

Kimberly trades some of her homegrown tomatoes to her neighbor,Ron,for some green peppers fresh from Ron's garden.This type of trade represents an example of:

Correct AnswerverifiedShow Answer

To stimulate the economy during a recession,the Fed would:

Correct AnswerverifiedShow Answer

Commercial banks attempt to profit by using funds deposited by customers to make interest-bearing loans to borrowers.

Correct AnswerverifiedShow Answer

After the bank failures of the Great Depression,the U.S.government formed three organizations: the FDIC Federal Deposit Insurance Corporation);the SAIF Savings Association Insurance Fund);and,NCUA National Credit Union Administration)to restore people's confidence and insure deposits.

Correct AnswerverifiedShow Answer

Chad travels extensively for his company.He stays at hotels that provide him with an) ____________ that is imbedded with his personal information as well as a code to unlock his hotel room.

Correct AnswerverifiedShow Answer

The U.S.government has done its best to create dollar bills that are easily duplicated.

Correct AnswerverifiedShow Answer

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The World Bank and the International Mon...
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