Exam 18: Understanding Money, Banking, and Credit

Jeff Becker is a truck driver for Eastside Distributors. As part of his job, he not only delivers merchandise but is involved in selling, inventory control, and collecting on accounts. Tuesday was a banner collection day for Jeff. He collected money on nearly every account. However, he did not take the time to count the cash carefully because he also had to take over another truck driver's route. He knew that according to company policy, he would have to make up any shortage. When he checked in for the day, the bookkeeper told him that one of his twenties was "no good." Jeff demanded a second expert opinion because money is

Very few borrowers follow lenders' repayment terms.

Pile & Joseph (P&J) Enterprises wants to obtain long-term financing for a commercial real estate project, but it does not want to go to a regular bank for help. Which of the following institutions could help P&J?

Collateral is real estate, stocks, bonds, equipment, or any other asset of value pledged as security for a loan.

When the Fed lowers the discount rate, it is more difficult and more expensive for banks to obtain money.

Most POS terminals are located in banks.

The U.S. government's bank is

A business owner applying for a loan should

Typically, activity fees for personal checking accounts range between $35 and $50 a month.

How do the Federal Reserve's open-market operations affect the economy? What is the relationship between open-market operations and the federal funds rate?

Many experts knowledgeable in the banking industry believe the globalization of the banking industry will continue due, in part, to the interrelated nature of national economies.

In an inflationary period, as prices go up, money gains value because it can buy more.

The percentage of deposits that a bank must retain for depositors is called

Brandy uses her debit card for most of her everyday purchases. The main reason she uses her debit card is probably because

Community Bank Jeffrey is the training manager for the Community Bank in Maryland. Jeffrey has developed a training program for all new employees that emphasizes understanding the basics of money. Jeffrey and the bank's management believe that if the employees understand the basics of money, they can utilize the information in their own personal finances as well as guide and answer questions from bank customers. The bank recently hired Laila. She was hired at a high-level position because she brought with her extensive bank management experience. Laila's responsibilities included making sure that the reserve requirement would always be met and keeping track of the interest rate that the Federal Reserve System charged for loans to member banks. -Refer to Community Bank. Because of her previous banking experience, Laila knows that a reserve requirement is

A document stating that the bank will pay the depositor a guaranteed interest rate for money left on deposit for a specified period of time is a(n)

Kimberly writes a check from her checking account at Citizens' Bank for a new dress at a local dress shop, Capagallos. Capagallos's bank is the First National Bank of the local area. How does the check-clearing process work in this scenario?

Which of the following organizations is responsible for insuring deposits in a credit union?

Ricardo Martinez collected $300 last weekend for mowing yards. Rather than spending the money immediately, he set it aside in an interest-bearing account. He hopes to accumulate more than $3,000 to offset his college expenses this fall. For Ricardo, money is serving as a

Most merchants are reluctant to use electronic check conversion because of the increased risk that the customer's check will bounce.