Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Internet banks offer customers better interest rates and lower fees because these businesses avoid the costs of constructing and maintaining a bank building.

Accepted Answer

A) True 
 B)False

Question 3

By reducing the reserve requirement, the Fed intends to increase the money supply.

Accepted Answer

A) True 
 B)False

Question 4

Commercial and consumer finance companies specialize in making low-interest loans to individuals and businesses with strong credit ratings.

Accepted Answer

A) True 
 B)False

Question 5

Alexander Hamilton persuaded Congress to create a central bank.

Accepted Answer

A) True 
 B)False

Question 6

Electronic cash is one of the newest forms of money.

Accepted Answer

A) True 
 B)False

Question 7

Herb has $20,000 in an interest-bearing time deposit with the Applebottom Bank and Trust Company. While earning a relatively attractive rate of interest, Herb had to agree to not withdraw any of the funds until the end of a three-year period. Herb's investment represents a(n) :

Accepted Answer

A)   passbook savings account.
B)   negotiable order of withdrawal (NOW)  account.
C)   individual deferred earnings account (IDE
A)  .
D)   certificate of deposit (C
D)  .E) A) and C)
F) None of the above

Question 8

Persons with deposits less than $100,000 in banks, savings and loans, and credit unions run the risk of losing their money in an economic downturn.

Accepted Answer

A) True 
 B)False

Question 9

Banks help businesses operate in other countries by exchanging the currency of one nation for the currency of another.

Accepted Answer

A) True 
 B)False

Question 10

The Fed uses ________ to regulate the money supply

Accepted Answer

A)   stock market investments
B)   the deposit requirement
C)   the political negotiation process
D)   the discount rateE) C) and D)
F) B) and C)

Question 11

The federal funds rate is the interest rate that banks charge each other.

Accepted Answer

A) True 
 B)False

Question 12

Traditionally, life insurance companies, pension funds, and brokerage firms are known as _________

Accepted Answer

A)   nonbanks
B)   thrift institutions
C)   bond companies
D)   federally chartered banksE) B) and C)
F) B) and D)

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

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

Correct Answer
verified

Herb has $20,000 in an interest-bearing time deposit with the Applebottom Bank and Trust Company. While earning a relatively attractive rate of interest, Herb had to agree to not withdraw any of the funds until the end of a three-year period. Herb's investment represents a(n) :

Correct Answer
verified

Internet banks offer customers better interest rates and lower fees because these businesses avoid the costs of constructing and maintaining a bank building.

Correct Answer
verified

Electronic cash is one of the newest forms of money.

Correct Answer
verified

The federal funds rate is the interest rate that banks charge each other.

Correct Answer
verified

Traditionally, life insurance companies, pension funds, and brokerage firms are known as _________

Correct Answer
verified

The Fed uses ________ to regulate the money supply

Correct Answer
verified

Commercial and consumer finance companies specialize in making low-interest loans to individuals and businesses with strong credit ratings.

Correct Answer
verified

Banks help businesses operate in other countries by exchanging the currency of one nation for the currency of another.

Correct Answer
verified

Persons with deposits less than $100,000 in banks, savings and loans, and credit unions run the risk of losing their money in an economic downturn.

Correct Answer
verified

By reducing the reserve requirement, the Fed intends to increase the money supply.

Correct Answer
verified

Alexander Hamilton persuaded Congress to create a central bank.

Correct Answer
verified

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

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

Correct AnswerverifiedShow Answer

Herb has $20,000 in an interest-bearing time deposit with the Applebottom Bank and Trust Company. While earning a relatively attractive rate of interest, Herb had to agree to not withdraw any of the funds until the end of a three-year period. Herb's investment represents a(n) :

Correct AnswerverifiedShow Answer

Internet banks offer customers better interest rates and lower fees because these businesses avoid the costs of constructing and maintaining a bank building.

Correct AnswerverifiedShow Answer

Electronic cash is one of the newest forms of money.

Correct AnswerverifiedShow Answer

The federal funds rate is the interest rate that banks charge each other.

Correct AnswerverifiedShow Answer

Traditionally, life insurance companies, pension funds, and brokerage firms are known as _________

Correct AnswerverifiedShow Answer

The Fed uses ________ to regulate the money supply

Correct AnswerverifiedShow Answer

Commercial and consumer finance companies specialize in making low-interest loans to individuals and businesses with strong credit ratings.

Correct AnswerverifiedShow Answer

Banks help businesses operate in other countries by exchanging the currency of one nation for the currency of another.

Correct AnswerverifiedShow Answer

Persons with deposits less than $100,000 in banks, savings and loans, and credit unions run the risk of losing their money in an economic downturn.

Correct AnswerverifiedShow Answer

By reducing the reserve requirement, the Fed intends to increase the money supply.

Correct AnswerverifiedShow Answer

Alexander Hamilton persuaded Congress to create a central bank.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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