Question 1

The banking panic of 1907 and the resulting cash shortage led to the formation of the:

Accepted Answer

A)  Federal Reserve System.
B)  Comptroller of the Currency.
C)  gold standard for currency,and the establishment of a gold repository at Fort Knox.
D)  FDIC.E) None of the above
F) B) and C)

Question 2

The Fed bought several billion dollars worth of U.S.government securities.The purpose of this action is to:

Accepted Answer

A)  decrease the size of the national debt.
B)  improve its financial position by investing in relatively safe interest-earning assets.
C)  stimulate the economy by increasing the amount of money in circulation.
D)  drive up interest rates to cool off inflationary pressures.E) B) and D)
F) A) and B)

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Juan has an authorized work permit issued by the U.S.government to work in the U.S.Each day,Juan travels from Mexico to El Paso,TX,to work in the construction trade.At the time that he was first employed his U.S.employer issued him an) ___________ .Each week,the employer scans his work stipend onto it.Juan can purchase with it,access cash through an ATM with it,and transfer funds with it.The risk for Juan is:

Accepted Answer

A)  paycheck;if the check is stolen,he is out the money.
B)  payroll debit card;it serves as a credit card,so if stolen he is out the money and any money he had left from the previous pay date.
C)  payroll debit card;if it is lost or stolen and someone successfully uses it to make purchases,he has no recourse-he is simply out the money.
D)  ETF;minimal because funds are transferred directly from the employer's account to the employee's account.E) All of the above
F) None of the above

Question 5

Technically,a bank can require depositors to give prior notice before they withdraw funds from time deposits.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Electronic cash is the newest form of money.

Accepted Answer

A) True 
 B)False

Question 8

Louis owns an import business.After traveling to France on numerous occasions,he developed a taste for fine French wines.A radio report that he heard this morning indicated that the dollar has fallen sharply against the euro.Based on this information,Louis expects that:

Accepted Answer

A)  American goods will become more expensive in France.
B)  French wines will become more expensive in the United States.
C)  French wines will become less expensive in the United States.
D)  the French government will place an embargo on American exports.E) B) and C)
F) All of the above

Question 9

How did banks contribute to the recent financial crisis?

Accepted Answer

A)  They began to offer investment products other than demand and time deposits.
B)  They provided loans higher than the discount rate.
C)  They made risky loans and then created mortgage backed securities from the assets they held.
D)  They refused to sell anything other than fixed-rate mortgages.E) A) and B)
F) None of the above

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

In the 1930s,during the Great Depression,the government started an insurance program to protect the public from bank failures.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Some financial services organizations lend money directly to corporations.

Accepted Answer

A) True 
 B)False

Question 14

When the value of the dollar increases relative to the euro,the number of U.S.dollars needed to purchase a bottle of French wine decreases.

Accepted Answer

A) True 
 B)False

Question 15

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) C) and D)

Question 16

During the Civil War,gold and silver coins were hoarded not because of their currency value,but because they were worth more than currency.

Accepted Answer

A) True 
 B)False

Question 17

Smart cards can allow the user to access secure areas within buildings or buy gas with the swipe of the card.

Accepted Answer

A) True 
 B)False

Question 18

Banks focus on the creditworthiness of the borrower when determining whether to grant a loan.

Accepted Answer

A) True 
 B)False

Question 19

Real dollars are made with various lines of colors such as peach and blue.They have art work that is off-center,and there are other identifiable watermarks for the purpose of making replication quite easy.

Accepted Answer

A) True 
 B)False

Question 20

Single handedly,the U.S.government's lack of regulation caused the banking crisis and collapse of banks that had been in business for several decades.

Accepted Answer

A) True 
 B)False

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

Single handedly,the U.S.government's lack of regulation caused the banking crisis and collapse of banks that had been in business for several decades.

Correct Answer
verified

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

Correct Answer
verified

The banking panic of 1907 and the resulting cash shortage led to the formation of the:

Correct Answer
verified

Louis owns an import business.After traveling to France on numerous occasions,he developed a taste for fine French wines.A radio report that he heard this morning indicated that the dollar has fallen sharply against the euro.Based on this information,Louis expects that:

Correct Answer
verified

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

Correct Answer
verified

In the 1930s,during the Great Depression,the government started an insurance program to protect the public from bank failures.

Correct Answer
verified

Banks focus on the creditworthiness of the borrower when determining whether to grant a loan.

Correct Answer
verified

Some financial services organizations lend money directly to corporations.

Correct Answer
verified

How did banks contribute to the recent financial crisis?

Correct Answer
verified

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

Correct Answer
verified

Smart cards can allow the user to access secure areas within buildings or buy gas with the swipe of the card.

Correct Answer
verified

Technically,a bank can require depositors to give prior notice before they withdraw funds from time deposits.

Correct Answer
verified

Electronic cash is the newest form of money.

Correct Answer
verified

During the Civil War,gold and silver coins were hoarded not because of their currency value,but because they were worth more than currency.

Correct Answer
verified

Real dollars are made with various lines of colors such as peach and blue.They have art work that is off-center,and there are other identifiable watermarks for the purpose of making replication quite easy.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

When the value of the dollar increases relative to the euro,the number of U.S.dollars needed to purchase a bottle of French wine decreases.

Correct Answer
verified

The Fed bought several billion dollars worth of U.S.government securities.The purpose of this action is to:

Correct Answer
verified

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

Single handedly,the U.S.government's lack of regulation caused the banking crisis and collapse of banks that had been in business for several decades.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The banking panic of 1907 and the resulting cash shortage led to the formation of the:

Correct AnswerverifiedShow Answer

Louis owns an import business.After traveling to France on numerous occasions,he developed a taste for fine French wines.A radio report that he heard this morning indicated that the dollar has fallen sharply against the euro.Based on this information,Louis expects that:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the 1930s,during the Great Depression,the government started an insurance program to protect the public from bank failures.

Correct AnswerverifiedShow Answer

Banks focus on the creditworthiness of the borrower when determining whether to grant a loan.

Correct AnswerverifiedShow Answer

Some financial services organizations lend money directly to corporations.

Correct AnswerverifiedShow Answer

How did banks contribute to the recent financial crisis?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Smart cards can allow the user to access secure areas within buildings or buy gas with the swipe of the card.

Correct AnswerverifiedShow Answer

Technically,a bank can require depositors to give prior notice before they withdraw funds from time deposits.

Correct AnswerverifiedShow Answer

Electronic cash is the newest form of money.

Correct AnswerverifiedShow Answer

During the Civil War,gold and silver coins were hoarded not because of their currency value,but because they were worth more than currency.

Correct AnswerverifiedShow Answer

Real dollars are made with various lines of colors such as peach and blue.They have art work that is off-center,and there are other identifiable watermarks for the purpose of making replication quite easy.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When the value of the dollar increases relative to the euro,the number of U.S.dollars needed to purchase a bottle of French wine decreases.

Correct AnswerverifiedShow Answer

The Fed bought several billion dollars worth of U.S.government securities.The purpose of this action is to:

Correct AnswerverifiedShow Answer

Correct Answer
verified

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