Question 1

Credit unions represent nonprofit,member-owned financial cooperatives that offer the full variety of banking services to their members.

Accepted Answer

A) True 
 B)False

Question 2

The International Monetary Fund does not lend money.

Accepted Answer

A) True 
 B)False

Question 3

__________ occurs when goods are traded directly for other goods.

Accepted Answer

A)   Barter
B)   Direct exchange
C)   Direct marketing
D)   CreditE) C) and D)
F) None of the above

Question 4

Pleased with the service provided by a national brokerage house when he bought and sold stocks and bonds,Ted would like to have this brokerage firm handle more of his financial needs.If Ted explores the services offered by such firms in more depth,he will find that:

Accepted Answer

A)   federal laws prohibit brokerage firms from competing with banks,savings and loan associations,and credit unions.
B)   although brokerage firms can offer some banking services,they typically are less efficient at providing them than banks,because they specialize in buying and selling securities.
C)   brokerage firms are becoming serious competitors for banks and other depository institutions by offering high-yield combination savings and checking accounts and money market accounts,as well as certain types of loans.
D)   although brokerage firms offer attractive banking services,federal law prohibits individual investors from holding both a checking account and a securities account with the same firm.E) None of the above
F) A) and B)

Question 5

The Federal Reserve establishes the tax policies of the U.S.

Accepted Answer

A) True 
 B)False

Question 6

When the value of the U.S.dollar increases relative to other currencies:

Accepted Answer

A)   the rate of inflation increases.
B)   the size of the national debt decreases.
C)   foreign goods become less expensive to U.S.consumers.
D)   U.S.goods become less expensive to foreign buyers.E) A) and B)
F) A) and C)

Question 7

More than ever,the American economy operates as a distinctly separate entity from the international economy.

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

A)   letter of credit
B)   certificate of deposit
C)   trade agreement
D)   banker's acceptanceE) B) and C)
F) A) and C)

Question 9

A __________ represents an unconditional agreement by a bank to pay a specified amount at a particular time.

Accepted Answer

A)   certified trade acceptance
B)   banker's acceptance
C)   letter of credit
D)   guaranteed funds agreementE) None of the above
F) B) and C)

Question 10

The electronic transfer of money increases the Federal Reserve's check-clearing operations.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Barry has $22,000 in a savings account with the Scott Credit Union.While economic conditions have caused financial institutions to struggle,Barry feels that his money is safe due to the fact that the credit union's accounts are protected by the:

Accepted Answer

A)   Federal Deposit Insurance Corporation (FDI
C)  .
B)   Credit Union Insurance Fund (CUIF) .
C)   National Alliance of Credit Union Underwriters (NACUU) .
D)   National Credit Union Administration (NCU
A)  .E) C) and D)
F) None of the above

Question 13

The M-1 definition of the money supply includes travelers' checks.

Accepted Answer

A) True 
 B)False

Question 14

The Federal Reserve assists in the processing of checks between banks.

Accepted Answer

A) True 
 B)False

Question 15

Single handedly,the U.S.government's lack of regulation caused the banking crisis and collapse of banks that had been in business for several decades.

Accepted Answer

A) True 
 B)False

Question 16

As a response to the bank failures of the _______,a system of federal deposit insurance was established to strengthen the banking system.

Accepted Answer

A)   Civil War
B)   wildcat banking crisis of the 1880s
C)   Great Depression
D)   banking crisis of the early 1980sE) None of the above
F) A) and B)

Question 17

The Federal Reserve System consists of ________ Federal Reserve banks.

Accepted Answer

A)   5
B)   9
C)   12
D)   14E) A) and D)
F) All of the above

Question 18

Savings and loan associations,also known as thrift institutions,were created to promote consumer thrift and home ownership.

Accepted Answer

A) True 
 B)False

Question 19

The rate of interest charged by the Federal Reserve is called the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 20

All federally chartered banks are members of the Federal Reserve.

Accepted Answer

A) True 
 B)False

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

As a response to the bank failures of the _______,a system of federal deposit insurance was established to strengthen the banking system.

Correct AnswerverifiedShow Answer

Credit unions represent nonprofit,member-owned financial cooperatives that offer the full variety of banking services to their members.

Correct AnswerverifiedShow Answer

The Federal Reserve establishes the tax policies of the U.S.

Correct AnswerverifiedShow Answer

The International Monetary Fund does not lend money.

Correct AnswerverifiedShow Answer

A __________ represents an unconditional agreement by a bank to pay a specified amount at a particular time.

Correct AnswerverifiedShow Answer

When the value of the U.S.dollar increases relative to other currencies:

Correct AnswerverifiedShow Answer

Barry has $22,000 in a savings account with the Scott Credit Union.While economic conditions have caused financial institutions to struggle,Barry feels that his money is safe due to the fact that the credit union's accounts are protected by the:

Correct AnswerverifiedShow Answer

The Federal Reserve assists in the processing of checks between banks.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Savings and loan associations,also known as thrift institutions,were created to promote consumer thrift and home ownership.

Correct AnswerverifiedShow Answer

Single handedly,the U.S.government's lack of regulation caused the banking crisis and collapse of banks that had been in business for several decades.

Correct AnswerverifiedShow Answer

The rate of interest charged by the Federal Reserve is called the federal funds rate.

Correct AnswerverifiedShow Answer

Pleased with the service provided by a national brokerage house when he bought and sold stocks and bonds,Ted would like to have this brokerage firm handle more of his financial needs.If Ted explores the services offered by such firms in more depth,he will find that:

Correct AnswerverifiedShow Answer

__________ occurs when goods are traded directly for other goods.

Correct AnswerverifiedShow Answer

The electronic transfer of money increases the Federal Reserve's check-clearing operations.

Correct AnswerverifiedShow Answer

The M-1 definition of the money supply includes travelers' checks.

Correct AnswerverifiedShow Answer

The Federal Reserve System consists of ________ Federal Reserve banks.

Correct AnswerverifiedShow Answer

More than ever,the American economy operates as a distinctly separate entity from the international economy.

Correct AnswerverifiedShow Answer

All federally chartered banks are members of the Federal Reserve.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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