Question 1

In international payments,equal money inflows and outflows can result in no money being transferred between countries.

Accepted Answer

A) True 
 B)False  True

Question 2

In mutual savings banks,all depositors are considered owners of the bank.

Accepted Answer

A) True 
 B)False  True

Question 3

How does the Fed's monetary policy influence banks' willingness to loan money?

Accepted Answer

Monetary policy is the management of the nation's economic growth through money supply and interest rates; by controlling these factors,the Fed influences banks' ability and willingness to loan money.
Explanation:For example, in 2009, the Fed launched its most aggressive buying of long-term Treasury bonds in history-$300 billion-to fight the recession. The purchases were intended to push up market prices for Treasuries and thereby drive down interest rates. As long-term Treasury rates fell, other interest rates soon followed, including rates for home mortgages, business loans, and consumer loans.

Question 4

What is the difference between a credit card and a debit card?

Accepted Answer

Credit cards allow users to borrow money

Question 5

A senior manager argues that the negative perception associated with mounting credit card debt will affect StarMart.Which of the following would be the MOST effective measure StarMart could take to address this potential problem?

Accepted Answer

A)  offering to forgive all debt more than 90 days old 
B)  making it clear that StarMart is a different entity than Axiom-Star 
C)  pointing out the records and practices of the worst-behaved credit companies 
D)  extending the expiration date of StarMart reward points 
E)  extending credit only to those who are very likely to be able to pay their bills 
A)  offering to forgive all debt more than 90 days old 
B)  making it clear that StarMart is a different entity than Axiom-Star 
C)  pointing out the records and practices of the worst-behaved credit companies 
D)  extending the expiration date of StarMart reward points 
E)  extending credit only to those who are very likely to be able to pay their bills

Question 6

What is a debit card?

Accepted Answer

Debit cards allow only the transfer of m

Question 7

Which of the following is NOT part of the M-2 money supply?

Accepted Answer

A)  debit card account 
B)  time deposits 
C)  money market mutual funds 
D)  savings account 
E)  credit card account 
A)  debit card account 
B)  time deposits 
C)  money market mutual funds 
D)  savings account 
E)  credit card account

Question 8

Banks are subject to prosecution when they fail to maintain systems for identifying and reporting suspicious activities.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following indices indicates the relative strength of the currencies of two countries?

Accepted Answer

A)  trade rate 
B)  exchange rate 
C)  trade balance 
D)  relative gross national products 
E)  international loan rate 
A)  trade rate 
B)  exchange rate 
C)  trade balance 
D)  relative gross national products 
E)  international loan rate

Question 10

Which of the following affects the value of money?

Accepted Answer

A)  how much currency is in circulation 
B)  how many units the currency can be divided into 
C)  how portable the form of currency is 
D)  how durable the form of currency is 
E)  how much currency has been saved 
A)  how much currency is in circulation 
B)  how many units the currency can be divided into 
C)  how portable the form of currency is 
D)  how durable the form of currency is 
E)  how much currency has been saved

Question 11

Like most of the federal government,the governors of the Federal Reserve System are democratically elected by the citizens of the United States.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following financial institutions are considered to be owned by their depositors?

Accepted Answer

A)  commercial banks and savings and loan associations 
B)  savings and loan associations and mutual savings banks 
C)  mutual savings banks and credit unions 
D)  credit unions and pension funds 
E)  pension funds and savings institutions 
A)  commercial banks and savings and loan associations 
B)  savings and loan associations and mutual savings banks 
C)  mutual savings banks and credit unions 
D)  credit unions and pension funds 
E)  pension funds and savings institutions

Question 13

Which of the following is NOT part of the M-1 supply?

Accepted Answer

A)  currency at hand 
B)  currency amount of written checks 
C)  currency available through a debit card 
D)  currency in checking accounts 
E)  currency value of time deposits 
A)  currency at hand 
B)  currency amount of written checks 
C)  currency available through a debit card 
D)  currency in checking accounts 
E)  currency value of time deposits

Question 14

Under which of the following circumstances would the Federal Reserve System want to decrease the money supply by increasing the reserve requirement?

Accepted Answer

A)  The economy is experiencing severe inflation, and market activity is very low. Yet the financial institutions have a great deal of M-1 resources at their disposal that they are not investing. 
B)  The economy is experiencing severe inflation, yet market activity has been extremely high and erratic. 
C)  The economy is experiencing severe deflation, and market activity is very low. Yet the financial institutions have a great deal of M-1 resources at their disposal that they are not investing. 
D)  The economy is experiencing severe deflation, yet market activity has been extremely high and erratic. 
E)  The economy is experiencing severe deflation, market activity is very low, and most financial institutions are low on M-1 resources. 
A)  The economy is experiencing severe inflation, and market activity is very low. Yet the financial institutions have a great deal of M-1 resources at their disposal that they are not investing. 
B)  The economy is experiencing severe inflation, yet market activity has been extremely high and erratic. 
C)  The economy is experiencing severe deflation, and market activity is very low. Yet the financial institutions have a great deal of M-1 resources at their disposal that they are not investing. 
D)  The economy is experiencing severe deflation, yet market activity has been extremely high and erratic. 
E)  The economy is experiencing severe deflation, market activity is very low, and most financial institutions are low on M-1 resources.

Question 15

Which of the following pieces of information is not required by the USA Patriot Act for banks to collect for every customer?

Accepted Answer

A)  name 
B)  address 
C)  date of birth 
D)  place of birth 
E)  tax identification number 
A)  name 
B)  address 
C)  date of birth 
D)  place of birth 
E)  tax identification number

Question 16

Which of the following statements BEST describes how the Automated Clearing House Network (ACH)maintains its integrity as a processor of electronic payments?

Accepted Answer

A)  The ACH network is an institution within the Federal Bank System and is regulated by strict government standards. 
B)  The ACH network is a for-profit company and is regulated by its need to make a profit, which it can only do by strictly regulating itself. 
C)  The ACH network is a financial institution and is thus regulated by its obligations to its investors. 
D)  The ACH network is a not-for-profit association and is regulated by its independence from outside interests. 
E)  The ACH network is a professional organization to which all financial institutions are obligated to contribute resources and is regulated by the interests of these institutions. 
A)  The ACH network is an institution within the Federal Bank System and is regulated by strict government standards. 
B)  The ACH network is a for-profit company and is regulated by its need to make a profit, which it can only do by strictly regulating itself. 
C)  The ACH network is a financial institution and is thus regulated by its obligations to its investors. 
D)  The ACH network is a not-for-profit association and is regulated by its independence from outside interests. 
E)  The ACH network is a professional organization to which all financial institutions are obligated to contribute resources and is regulated by the interests of these institutions.

Question 17

Which of the following transactions is not included among Automated Clearing House payments?

Accepted Answer

A)  ATM deposits 
B)  business-to-business electronic payments 
C)  checks 
D)  Internet-initiated debit card payments 
E)  local tax payments 
A)  ATM deposits 
B)  business-to-business electronic payments 
C)  checks 
D)  Internet-initiated debit card payments 
E)  local tax payments

Question 18

In order to save money on transactional costs,the U.S.Treasury is moving to electronic fund transfers for payments rather than issuing checks.

Accepted Answer

A) True 
 B)False

Question 19

Gavin's district,like many others,is showing severe signs of inflation.What might his committee recommend to the Federal Reserve System in order to curb the current trend?

Accepted Answer

Inflation occurs when prices increase dr

Question 20

What happens to demand and price during times of inflation?

Accepted Answer

Demand for goods and services increases,

In international payments,equal money inflows and outflows can result in no money being transferred between countries.

In mutual savings banks,all depositors are considered owners of the bank.

How does the Fed's monetary policy influence banks' willingness to loan money?

What is the difference between a credit card and a debit card?

A senior manager argues that the negative perception associated with mounting credit card debt will affect StarMart.Which of the following would be the MOST effective measure StarMart could take to address this potential problem?

What is a debit card?

Which of the following is NOT part of the M-2 money supply?

Banks are subject to prosecution when they fail to maintain systems for identifying and reporting suspicious activities.

Which of the following indices indicates the relative strength of the currencies of two countries?

Which of the following affects the value of money?

Like most of the federal government,the governors of the Federal Reserve System are democratically elected by the citizens of the United States.

Which of the following financial institutions are considered to be owned by their depositors?

Which of the following is NOT part of the M-1 supply?

Under which of the following circumstances would the Federal Reserve System want to decrease the money supply by increasing the reserve requirement?

Which of the following pieces of information is not required by the USA Patriot Act for banks to collect for every customer?

Which of the following statements BEST describes how the Automated Clearing House Network (ACH)maintains its integrity as a processor of electronic payments?

Which of the following transactions is not included among Automated Clearing House payments?

In order to save money on transactional costs,the U.S.Treasury is moving to electronic fund transfers for payments rather than issuing checks.

Gavin's district,like many others,is showing severe signs of inflation.What might his committee recommend to the Federal Reserve System in order to curb the current trend?

What happens to demand and price during times of inflation?

The U.S.Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality for Producing Goods and Services

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

The Role of Accountants and Accounting Information

Managing Business Finances

Filters

Exam 16: Understanding Money and the Role of Banking

In international payments,equal money inflows and outflows can result in no money being transferred between countries.

In mutual savings banks,all depositors are considered owners of the bank.

How does the Fed's monetary policy influence banks' willingness to loan money?

What is the difference between a credit card and a debit card?

A senior manager argues that the negative perception associated with mounting credit card debt will affect StarMart.Which of the following would be the MOST effective measure StarMart could take to address this potential problem?

What is a debit card?

Which of the following is NOT part of the M-2 money supply?

Banks are subject to prosecution when they fail to maintain systems for identifying and reporting suspicious activities.

Which of the following indices indicates the relative strength of the currencies of two countries?

Which of the following affects the value of money?

Like most of the federal government,the governors of the Federal Reserve System are democratically elected by the citizens of the United States.

Which of the following financial institutions are considered to be owned by their depositors?

Which of the following is NOT part of the M-1 supply?

Under which of the following circumstances would the Federal Reserve System want to decrease the money supply by increasing the reserve requirement?

Which of the following pieces of information is not required by the USA Patriot Act for banks to collect for every customer?

Which of the following statements BEST describes how the Automated Clearing House Network (ACH)maintains its integrity as a processor of electronic payments?

Which of the following transactions is not included among Automated Clearing House payments?

In order to save money on transactional costs,the U.S.Treasury is moving to electronic fund transfers for payments rather than issuing checks.

Gavin's district,like many others,is showing severe signs of inflation.What might his committee recommend to the Federal Reserve System in order to curb the current trend?

What happens to demand and price during times of inflation?

The U.S.Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality for Producing Goods and Services

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

The Role of Accountants and Accounting Information

Managing Business Finances

Filters