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

An electronic funds transfer system (EFT) is an electronic transaction system used for paying bills, making direct deposits of paychecks, and paying for a purchase.

Designed to create more confidence in banking institutions, the FDIC was established

The Fed uses ________ to regulate the money supply.

When the Fed increases the discount rate, banks

Commercial banks offer services to depositors and borrowers.

Erica has three types of deposits at her credit union. She has a checking account in her own name worth $42,000, a joint savings account with her husband, which currently holds $91,000, and an IRA account worth $145,000. Her deposits are at risk because they exceed the $250,000 limit on insurance coverage by NCUA.

The ________ provides the same results as a check because it withdraws funds from a checking account.

As nonprofit institutions, credit unions enjoy an exemption from federal income taxes.

Commercial banks attempt to profit by using funds deposited by customers to make interest-bearing loans to borrowers.

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

Rob works as a loan officer for a major U.S. commercial bank, specializing in international loans. When considering loans to governments and businesses in other nations, Rob

The U.S. government has done its best to create dollar bills that are easily duplicated.

The International Monetary Fund assists with the smooth flow of money among nations.

Money is anything people generally accept as payment for goods and services.

Barter is the trading of goods and services for other goods and services.

For banks, check-processing activities

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

________ persuaded Congress to establish the first central bank in the United States.

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

A(n) ________ accepts savings and checking account deposits and provides home mortgage loans.