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

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Question 81

True/False

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

A) True
B) False

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Question 82

Multiple Choice

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

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

E) A) and B)
F) All of the above

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Question 83

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Due to federal regulations limiting their investment opportunities, pension funds play a minor role in U.S. financial markets.

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

________ involve(s) the Fed buying and selling U.S. government securities to increase or decrease the money supply

By the time of the Civil War, the efficient banking system of the United States was the envy of the rest of the world.

The Fed bought several billion dollars worth of U.S. government securities. The purpose of this action is to:

The M-3 includes M-1 money, but not M-2 money.

The IMF's goal is to maintain a global monetary system.

Money is anything people generally accept as payment for goods and services.

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

The Federal Reserve is the "bankers' bank."

H & Q Importers arranged to have a French winery ship a large quantity of fine wine to the United States. By signing a(n) ______________ H & Q authorized its bank to make full payment to the French winery if and when the wine arrives at the H & Q warehouse in Boston

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

Which of the following is a major difference between Internet banks and traditional banks?

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.

Today's consumers have fewer options and less flexibility as a result of increased regulation of the banking industry.

Electronic funds transfer (EFT) tools include debit cards, smart cards, direct deposit, direct payments, and electronic check conversion.

Everything else held constant, an international bank based in New York would prefer to loan money to an efficient firm operating in San Paulo, Brazil, than an inefficient firm operating in southern California.

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.