Question 1

A money market fund is a special type of mutual fund that:

Accepted Answer

A)  invests in short-term debt securities issued by large corporations.
B)  dispenses cash and allows balance inquiries.
C)  offers slightly lower rates of interest than bank money market accounts.
D)  is set aside by corporations to provide retirement income.
E)  represents specialized individual checking accounts.F) A) and E)
G) B) and C)

Question 2

If consumers do not pay off their entire credit card balance,they:

Accepted Answer

A)  have to pay interest on the total paid and unpaid amount.
B)  will receive interest on the paid amount.
C)  have to pay interest on the unpaid amount.
D)  will get a rebate from the card issuer.
E)  have their purchased goods repossessed by the creditors.F) A) and D)
G) A) and C)

Question 3

When the Federal Reserve Board sells government securities,the:

Accepted Answer

A)  money supply in the economy decreases.
B)  money supply in the economy increases.
C)  property taxes increase.
D)  property taxes decrease.
E)  money supply in the market becomes stable.F) A) and B)
G) A) and D)

Question 4

The _____ insures individual bank accounts.

Accepted Answer

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

Question 5

_____ or time deposits are accounts with funds that can be withdrawn only with advance notice.

Accepted Answer

A)  Current accounts
B)  Checking accounts
C)  Money market accounts
D)  Savings accounts
E)  Negotiable Order of Withdrawal accountsF) A) and E)
G) C) and D)

Question 6

There is an increase in economic activity when the Federal Reserve Board:

Accepted Answer

A)  sells government securities.
B)  lowers the discount rate.
C)  increases reserve requirements.
D)  restricts credit controls.
E)  sells investments.F) None of the above
G) A) and E)

Question 7

Which of the following statements is true of money?

Accepted Answer

A)  It is not a gold-backed currency.
B)  It is not readily convertible to precious metal.
C)  It is anything accepted in exchange for goods and services.
D)  It is exclusively dispatched through automated teller machines.
E)  It needs to be accompanied by a government "note" or promise to be considered valid.F) D) and E)
G) A) and D)

Question 8

The oldest and largest of all financial institutions are:

Accepted Answer

A)  thrift institutions.
B)  credit unions.
C)  savings & loans associations.
D)  insurance companies.
E)  commercial banks.F) C) and D)
G) D) and E)

Question 9

Which of the following factors has challenged the banking industry and forced it to undergo changes?

Accepted Answer

A)  Decrease in international trade
B)  Rapid technological innovations
C)  Dearth of human resources
D)  Stagnation of growth
E)  Political instabilitiesF) B) and D)
G) B) and C)

Question 10

Why are credit cards a popular substitute for cash payments?

Accepted Answer

A)  They provide tax benefits.
B)  They exempt users from paying transaction fees to merchants.
C)  They allow users to avail interest-free credit.
D)  They allow merchants to avail unlimited credit.
E)  They are accepted by merchants around the world.F) A) and B)
G) All of the above

Question 11

Commercial banks:

Accepted Answer

A)  rely on checking and savings accounts for funds.
B)  invest exclusively in residential mortgages.
C)  use all their funds to make loans to businesses.
D)  are the most recently established of all financial institutions.
E)  do not provide loans for vacations.F) A) and C)
G) A) and E)

Question 12

In reaction to the financial meltdown and severe recession,Congress passed the _____ to eliminate the ability of the banks to create the same problem in the future.

Accepted Answer

A)  Sarbanes-Oxley Act
B)  Celler-Kefauver Act
C)  Dodd-Frank Act
D)  Glass-Steagall Act
E)  Gramm-Leach-Bliley ActF) A) and B)
G) All of the above

Question 13

In general,the longer the term of a certificate of deposit,the:

Accepted Answer

A)  higher is its liquidity.
B)  higher is its interest rate.
C)  lower is its value.
D)  lower is its interest rate.
E)  higher is its inflation rate.F) A) and B)
G) None of the above

Question 14

Which of the following is a peer-to-peer lender?

Accepted Answer

A)  Kickstarter
B)  Indiegogo
C)  RocketHub
D)  Prosper
E)  CrowdriseF) A) and B)
G) A) and C)

Question 15

_____ allow consumers to perform an ever-widening array of financial transactions from their personal or work computers.

Accepted Answer

A)  Online banking services
B)  Automated clearinghouses
C)  Automated teller machines
D)  Credit card terminals
E)  Magnetic stripe readersF) B) and D)
G) B) and E)

Exam 15: Money and the Financial System

Which of the following is a peer-to-peer lender?

Correct Answer
verified

Which of the following statements is true of money?

Correct Answer
verified

The _____ insures individual bank accounts.

Correct Answer
verified

Which of the following factors has challenged the banking industry and forced it to undergo changes?

Correct Answer
verified

When the Federal Reserve Board sells government securities,the:

Correct Answer
verified

Why are credit cards a popular substitute for cash payments?

Correct Answer
verified

_____ allow consumers to perform an ever-widening array of financial transactions from their personal or work computers.

Correct Answer
verified

In general,the longer the term of a certificate of deposit,the:

Correct Answer
verified

There is an increase in economic activity when the Federal Reserve Board:

Correct Answer
verified

In reaction to the financial meltdown and severe recession,Congress passed the _____ to eliminate the ability of the banks to create the same problem in the future.

Correct Answer
verified

A money market fund is a special type of mutual fund that:

Correct Answer
verified

The oldest and largest of all financial institutions are:

Correct Answer
verified

_____ or time deposits are accounts with funds that can be withdrawn only with advance notice.

Correct Answer
verified

Commercial banks:

Correct Answer
verified

If consumers do not pay off their entire credit card balance,they:

Correct Answer
verified

Exam 15: Money and the Financial System

Which of the following is a peer-to-peer lender?

Correct AnswerverifiedShow Answer

Which of the following statements is true of money?

Correct AnswerverifiedShow Answer

The _____ insures individual bank accounts.

Correct AnswerverifiedShow Answer

Which of the following factors has challenged the banking industry and forced it to undergo changes?

Correct AnswerverifiedShow Answer

When the Federal Reserve Board sells government securities,the:

Correct AnswerverifiedShow Answer

Why are credit cards a popular substitute for cash payments?

Correct AnswerverifiedShow Answer

_____ allow consumers to perform an ever-widening array of financial transactions from their personal or work computers.

Correct AnswerverifiedShow Answer

In general,the longer the term of a certificate of deposit,the:

Correct AnswerverifiedShow Answer

There is an increase in economic activity when the Federal Reserve Board:

Correct AnswerverifiedShow Answer

In reaction to the financial meltdown and severe recession,Congress passed the _____ to eliminate the ability of the banks to create the same problem in the future.

Correct AnswerverifiedShow Answer

A money market fund is a special type of mutual fund that:

Correct AnswerverifiedShow Answer

The oldest and largest of all financial institutions are:

Correct AnswerverifiedShow Answer

_____ or time deposits are accounts with funds that can be withdrawn only with advance notice.

Correct AnswerverifiedShow Answer

Commercial banks:

Correct AnswerverifiedShow Answer

If consumers do not pay off their entire credit card balance,they:

Correct AnswerverifiedShow Answer

Correct Answer
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