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

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

Which of the following is included in the M-2 definition of the money supply but not the M-1 definition?

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:

Prior to the establishment of the Federal Reserve System in 1913,the United States had no experience with a central bank.

When the value of the dollar falls,foreign goods become less expensive for American consumers.

The community college where Jake works requires all employees to contribute to a pension fund.At this time,he is not too worried about the safety of this contribution because:

When a customer purchases an item with a debit card:

The people living on the island nation of Wacki-ki readily accept a certain type of seashell as payment for the goods and services they trade.For Wackians (the name of Wacki-ki natives),seashells serve as money.

By the time of the Civil War,the efficient banking system of the United States was the envy of the rest of the world.

Which of the following institutions monitors the monetary policies of member nations to ensure a global monetary system that works best for all nations?

Some financial services organizations lend money directly to corporations.

The ___________ rate represents the interest rate charged by the Fed when loaning funds to member banks.

The FDIC traditionally protects depositors up to $250,000 per account.

The problem with bartering is:

The ability to access funds without a penalty helps to explain why certificates of deposit (CDs)have gained popularity among conservative investors and savers.

The technical name for a savings account is a:

Cory worries that his $7,537 in a checking account at the Lottadoe National Bank could be lost if the bank fails.Lottadoe is a FDIC (Federal Deposit Insurance Corporation)member bank,which insures Cory's account up to $250,000.

Which of the following statements best summarizes the difference between M-1 and M-2?

The Federal Reserve consists of seven Federal Reserve districts.

Today,a regular _____________ is a system where you can exchange goods for other goods.You submit your goods and you receive trade credit that you can use to buy other goods.