FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

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

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 161

True/False

Review LaterAdd Note

Review Later

The U.S.banking system includes insurance companies and pension funds.

A) True
B) False

Correct Answer

verified

Show Answer

Question 162

Multiple Choice

Review LaterAdd Note

Review Later

Early settlers of the New World relied heavily on barter because:

A) they found barter more convenient than the use of money.
B) strict laws limited the number of coins that could be brought into the colonies.
C) money had not yet evolved.
D) they wanted to protest against British control of the banking system.

E) C) and D)
F) B) and D)

Correct Answer

verified

Show Answer

Question 163

Multiple Choice

Review LaterAdd Note

News reports indicate that the Fed plans to announce its third increase in the discount rate in the past five months.Additional reports suggest that the Fed may also increase the reserve requirement in the near future.Apparently the Fed perceives the number one problem facing the economy is:

The Fed plans to raise the discount rate to 6%.This indicates that:

When the Fed increases the reserve requirement,banks:

Bank crises tend to correlate with economic recessions.

To reduce inflation,the Federal Reserve increases the discount rate.

The goal of Federal Reserve monetary policy is to affect the level of competition in the U.S.banking system.

Louis owns an import business.After traveling to France on numerous occasions,he developed a taste for fine French wines.A radio report that he heard this morning indicated that the dollar has fallen sharply against the euro.Based on this information,Louis expects that:

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 reserve requirement represents the interest rate charged by the Federal Reserve for government guaranteed student loans.

The money supply represents the amount of money the Federal Reserve Bank makes available for people to buy goods and services.

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

When a commercial bank fails,depositors lose all of their money.

When the Fed sells U.S.government securities,the U.S.money supply increases.

Fortunately,the Troubled Assets Relief Program (TARP)took care of the looming bankruptcy problems of major financial services institutions during 2008-2010,and tax payers were not hit with additional bailouts.

A saving account is also known as a time deposit.

Due to the fact that investors did not individually purchase MBSs (mortgage-backed securities)in their investment accounts,they remained unaffected when the value of some of these investments became worthless.

When traveling in other countries,tourists can use their MasterCard or Visa bankcards to obtain foreign currencies at ATMs.

Companies are now developing ways to send money across national boundaries using mobile phones.