Question 1

Joe deposits $200 in currency into his checking account at a bank.This deposit is treated as

Accepted Answer

A)  a subtraction of $200 from the money supply because the $200 in currency is no longer in circulation.
B)  an addition of $200 to the money supply because of the creation of a checkable deposit of $200.
C)  an addition of $200 to the money supply because the bank holds $200 in currency and the checking account has been increased by $200.
D)  no change in the money supply because the $200 in currency has been converted to a $200 increase in checkable deposits.E) B) and D)
F) B) and C)

Question 2

"Thrifts" refers to the following institutions except

Accepted Answer

A)  commercial banks.
B)  credit unions.
C)  mutual savings banks.
D)  savings and loan associations.E) A) and B)
F) B) and D)

Question 3

The Federal Open Market Committee (FOMC)  of the Federal Reserve System is primarily for

Accepted Answer

A)  maintaining cash reserves that can be used to settle international transactions.
B)  supervising banks to make sure that markets are open to all and remain competitive.
C)  issuing currency and acting as the fiscal agent for the Federal government.
D)  setting the Fed's monetary policy and directing the purchase and sale of government securities.E) C) and D)
F) A) and B)

Question 4

The 12 Federal Reserve Banks are governmentally owned but privately controlled.

Accepted Answer

A) True 
 B)False

Question 5

TD Ameritrade, Charles Schwab, and Merrill Lynch are all primarily

Accepted Answer

A)  investment banks.
B)  mutual fund companies.
C)  insurance companies.
D)  securities firms.E) A) and C)
F) A) and D)

Question 6

The 12 Federal Reserve Banks can best be characterized as

Accepted Answer

A)  central banks, banker's banks, and quasi-public banks.
B)  regional banks, public banks, and member banks.
C)  investment banks, banker's banks, and public banks.
D)  national banks, quasi-public banks, and investment banks.E) C) and D)
F) B) and D)

Question 7

Currency held in the vault of First National Bank is

Accepted Answer

A)  counted as part of M1.
B)  counted as part of M2 but not M1.
C)  only counted as part of M1 if it was deposited into a checking account.
D)  not counted as part of the money supply.E) All of the above
F) B) and C)

Question 8

"Near monies" are included in

Accepted Answer

A)  both M1 and M2.
B)  M2 only.
C)  M1 only.
D)  neither M1 nor M2.E) A) and D)
F) C) and D)

Question 9

The following financial institutions traditionally accept deposits from savers, except

Accepted Answer

A)  thrifts.
B)  mutual fund companies.
C)  investment banks.
D)  pension funds.E) A) and B)
F) All of the above

Question 10

Which of the following institutions does not provide checkable-deposit services to the general public?

Accepted Answer

A)  commercial banks
B)  savings and loan associations
C)  U.S.Treasury
D)  credit unionsE) A) and B)
F) C) and D)

Question 11

The government bailout of large institutions creates the problem of moral hazard, which means that these large firms will

Accepted Answer

A)  not be able to pay back the bailout money.
B)  have an incentive to make highly risky investments.
C)  now have to play it safer to reduce their risks.
D)  be limited in terms of the securities and services that they get involved in.E) C) and D)
F) None of the above

Exam 34: Money, Banking, and Financial Institutions

Currency held in the vault of First National Bank is

Correct Answer
verified

The following financial institutions traditionally accept deposits from savers, except

Correct Answer
verified

TD Ameritrade, Charles Schwab, and Merrill Lynch are all primarily

Correct Answer
verified

"Thrifts" refers to the following institutions except

Correct Answer
verified

Joe deposits $200 in currency into his checking account at a bank.This deposit is treated as

Correct Answer
verified

Which of the following institutions does not provide checkable-deposit services to the general public?

Correct Answer
verified

The 12 Federal Reserve Banks can best be characterized as

Correct Answer
verified

The 12 Federal Reserve Banks are governmentally owned but privately controlled.

Correct Answer
verified

"Near monies" are included in

Correct Answer
verified

The government bailout of large institutions creates the problem of moral hazard, which means that these large firms will

Correct Answer
verified

The Federal Open Market Committee (FOMC) of the Federal Reserve System is primarily for

Correct Answer
verified

Exam 34: Money, Banking, and Financial Institutions

Currency held in the vault of First National Bank is

Correct AnswerverifiedShow Answer

The following financial institutions traditionally accept deposits from savers, except

Correct AnswerverifiedShow Answer

TD Ameritrade, Charles Schwab, and Merrill Lynch are all primarily

Correct AnswerverifiedShow Answer

"Thrifts" refers to the following institutions except

Correct AnswerverifiedShow Answer

Joe deposits $200 in currency into his checking account at a bank.This deposit is treated as

Correct AnswerverifiedShow Answer

Which of the following institutions does not provide checkable-deposit services to the general public?

Correct AnswerverifiedShow Answer

The 12 Federal Reserve Banks can best be characterized as

Correct AnswerverifiedShow Answer

The 12 Federal Reserve Banks are governmentally owned but privately controlled.

Correct AnswerverifiedShow Answer

"Near monies" are included in

Correct AnswerverifiedShow Answer

The government bailout of large institutions creates the problem of moral hazard, which means that these large firms will

Correct AnswerverifiedShow Answer

The Federal Open Market Committee (FOMC) of the Federal Reserve System is primarily for

Correct AnswerverifiedShow Answer

Correct Answer
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