Question 1

Currency held in the vault of First National Bank is:

Accepted Answer

A)   counted as part of M1.
B)   counted as part of M2 but not M1.
C)   only counted as part of M1 if it was deposited into a checking account.
D)   not counted as part of the money supply.E) None of the above
F) B) and C)

Question 2

In the United States,the money supply (M1) is comprised of:

Accepted Answer

A)   coins,paper currency,and checkable deposits.
B)   currency,checkable deposits,and Series E bonds.
C)   coins,paper currency,checkable deposits,and credit balances with brokers.
D)   paper currency,coins,gold certificates,and time deposits.E) A) and B)
F) A) and C)

Question 3

How much did the U.S.Congress allocate to the Troubled Asset Relief Program in 2008?

Accepted Answer

A)   $170 billion.
B)   $700 billion.
C)   $787 billion.
D)   $885 billion.E) B) and D)
F) None of the above

Question 4

Which of the following statements best describes the 12 Federal Reserve Banks?

Accepted Answer

A)   They are privately owned and privately controlled central banks whose basic goal is to provide an ample and orderly market for U.S.Treasury securities.
B)   They are privately owned and publicly controlled central banks whose basic function is to minimize the risks in commercial banking in order to make it a reasonably profitable industry.
C)   They are privately owned and publicly controlled central banks whose basic goal is to control the money supply and interest rates in promoting the general economic welfare.
D)   They are privately owned and publicly controlled central banks whose basic goal is to earn profits for their owners.E) A) and B)
F) A) and C)

Question 5

Firms whose central business is to offer security advice and buy and sell individual stocks and bonds for clients are known as:

Accepted Answer

A)   thrifts.
B)   pension fund companies.
C)   securities firms.
D)   insurance companies.E) A) and B)
F) All of the above

Question 6

When economists say that money serves as a unit of account,they mean that it is:

Accepted Answer

A)   a way to keep wealth in a readily spendable form for future use.
B)   a means of payment.
C)   a monetary unit for measuring and comparing the relative values of goods.
D)   declared as legal tender by the government.E) A) and D)
F) B) and C)

Question 7

To say that coins are "token money" means that:

Accepted Answer

A)   their face value is less than their intrinsic value.
B)   their face value is greater than their intrinsic value.
C)   their face value is equal to their intrinsic value.
D)   they are not legal tender.E) All of the above
F) A) and B)

Question 8

If the price index rises from 100 to 120,the purchasing power value of the dollar:

Accepted Answer

A)   may either rise or fall.
B)   will rise by one-sixth.
C)   will fall by one-sixth.
D)   will rise by 20 percent.E) A) and B)
F) A) and C)

Question 9

Which of the following statements is true as a result of Federal Reserve efforts to rescue the financial industry from the financial crisis of 2007 and 2008?

Accepted Answer

A)   From February 2008 to May 2009,the Fed oversaw the consolidation of 20 major financial institutions into fewer than a dozen.
B)   From March 2008 to February 2009,the Fed experienced a 50 percent decline in the value of assets held.
C)   From February 2008 to March 2009,Fed assets more than doubled to nearly $2 trillion.
D)   From February 2008 to March 2009,Fed lending caused the U.S.public debt to rise by over $1 trillion.E) B) and C)
F) None of the above

Question 10

Answer the question on the basis of the following list of assets: 1.Large-denominated ($100,000 and over) time deposits
2) Noncheckable savings deposits
3) Currency (coins and paper money) in circulation
4) Small-denominated (under $100,000) time deposits
5) Stock certificates
6) Checkable deposits
7) Money market deposit accounts
8) Money market mutual fund balances held by individuals
9) Money market mutual fund balances held by businesses
10) Currency held in bank vaults
Refer to the given list.Which of the following are considered to be "near-monies?"

Accepted Answer

A)   Items 2,5,8,and 9.
B)   All items except for 3.
C)   Items 2,4,7,and 8.
D)   Items 1,5,and 10.E) A) and D)
F) None of the above

Question 11

Assuming no other changes,if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion,the:

Accepted Answer

A)   M1 money supply will decline.
B)   M1 money supply will not change.
C)   M2 money supply will decline.
D)   M2 money supply will increase.E) B) and C)
F) All of the above

Question 12

The money supply is backed:

Accepted Answer

A)   by the government's ability to control the supply of money and therefore to keep its value relatively stable.
B)   by government bonds.
C)   dollar-for-dollar by gold and silver.
D)   by gold reserves representing a fraction of the total value of dollars in circulation.E) C) and D)
F) A) and C)

Question 13

Thrifts are known as "banker's banks" because they lend money to commercial banks.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following financial institutions was acquired by Bank of America as a result of the financial crisis of 2007 and 2008?

Accepted Answer

A)   Merrill Lynch
B)   Lehman Brothers
C)   Goldman Sachs
D)   AIGE) A) and D)
F) A) and C)

Question 15

Which role of the Federal Reserve was expanded directly as a result of the PDCF and TSLF?

Accepted Answer

A)   Supervising banks.
B)   Lender of last resort.
C)   Fiscal agent for the federal government.
D)   Issuing currency.E) A) and C)
F) None of the above

Question 16

Answer the question on the basis of the following list of assets: 1.Large-denominated ($100,000 and over) time deposits
2) Noncheckable savings deposits
3) Currency (coins and paper money) in circulation
4) Small-denominated (under $100,000) time deposits
5) Stock certificates
6) Checkable deposits
7) Money market deposit accounts
8) Money market mutual fund balances held by individuals
9) Money market mutual fund balances held by businesses
10) Currency held in bank vaults
Refer to the given list.The M1 definition of money comprises item(s) :

Accepted Answer

A)   6 only.
B)   3,4,and 6.
C)   3 and 6.
D)   3,6,and 10.E) B) and C)
F) A) and D)

Question 17

In February 2013,the supply of money (M1) in the United States was about:

Accepted Answer

A)   $1,112 billion.
B)   $2,472 billion.
C)   $1,359 billion.
D)   $10,412 billion.E) B) and C)
F) A) and B)

Question 18

The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 in:

Accepted Answer

A)   mutual fund companies and pension fund companies.
B)   thrifts and insurance companies.
C)   commercial banks and thrifts.
D)   securities firms and insurance companies.E) None of the above
F) C) and D)

Question 19

When economists say that money serves as a store of value,they mean that it is:

Accepted Answer

A)   a way to keep wealth in a readily spendable form for future use.
B)   a means of payment.
C)   a monetary unit for measuring and comparing the relative values of goods.
D)   declared as legal tender by the government.E) A) and C)
F) C) and D)

Question 20

Which of the following financial institutions declared bankruptcy as a result of the financial crisis of 2007 and 2008?

Accepted Answer

A)   Merrill Lynch
B)   Lehman Brothers
C)   Goldman Sachs
D)   AIGE) B) and C)
F) A) and C)

Exam 33: Money, Banking, and Financial Institutions

Thrifts are known as "banker's banks" because they lend money to commercial banks.

Correct Answer
verified

If the price index rises from 100 to 120,the purchasing power value of the dollar:

Correct Answer
verified

How much did the U.S.Congress allocate to the Troubled Asset Relief Program in 2008?

Correct Answer
verified

To say that coins are "token money" means that:

Correct Answer
verified

Firms whose central business is to offer security advice and buy and sell individual stocks and bonds for clients are known as:

Correct Answer
verified

In the United States,the money supply (M1) is comprised of:

Correct Answer
verified

When economists say that money serves as a store of value,they mean that it is:

Correct Answer
verified

Which of the following statements is true as a result of Federal Reserve efforts to rescue the financial industry from the financial crisis of 2007 and 2008?

Correct Answer
verified

Correct Answer
verified

Which of the following financial institutions declared bankruptcy as a result of the financial crisis of 2007 and 2008?

Correct Answer
verified

Which of the following statements best describes the 12 Federal Reserve Banks?

Correct Answer
verified

Which role of the Federal Reserve was expanded directly as a result of the PDCF and TSLF?

Correct Answer
verified

Correct Answer
verified

The money supply is backed:

Correct Answer
verified

Currency held in the vault of First National Bank is:

Correct Answer
verified

Which of the following financial institutions was acquired by Bank of America as a result of the financial crisis of 2007 and 2008?

Correct Answer
verified

The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 in:

Correct Answer
verified

In February 2013,the supply of money (M1) in the United States was about:

Correct Answer
verified

When economists say that money serves as a unit of account,they mean that it is:

Correct Answer
verified

Assuming no other changes,if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion,the:

Correct Answer
verified

Exam 33: Money, Banking, and Financial Institutions

Thrifts are known as "banker's banks" because they lend money to commercial banks.

Correct AnswerverifiedShow Answer

If the price index rises from 100 to 120,the purchasing power value of the dollar:

Correct AnswerverifiedShow Answer

How much did the U.S.Congress allocate to the Troubled Asset Relief Program in 2008?

Correct AnswerverifiedShow Answer

To say that coins are "token money" means that:

Correct AnswerverifiedShow Answer

Firms whose central business is to offer security advice and buy and sell individual stocks and bonds for clients are known as:

Correct AnswerverifiedShow Answer

In the United States,the money supply (M1) is comprised of:

Correct AnswerverifiedShow Answer

When economists say that money serves as a store of value,they mean that it is:

Correct AnswerverifiedShow Answer

Which of the following statements is true as a result of Federal Reserve efforts to rescue the financial industry from the financial crisis of 2007 and 2008?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following financial institutions declared bankruptcy as a result of the financial crisis of 2007 and 2008?

Correct AnswerverifiedShow Answer

Which of the following statements best describes the 12 Federal Reserve Banks?

Correct AnswerverifiedShow Answer

Which role of the Federal Reserve was expanded directly as a result of the PDCF and TSLF?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The money supply is backed:

Correct AnswerverifiedShow Answer

Currency held in the vault of First National Bank is:

Correct AnswerverifiedShow Answer

Which of the following financial institutions was acquired by Bank of America as a result of the financial crisis of 2007 and 2008?

Correct AnswerverifiedShow Answer

The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 in:

Correct AnswerverifiedShow Answer

In February 2013,the supply of money (M1) in the United States was about:

Correct AnswerverifiedShow Answer

When economists say that money serves as a unit of account,they mean that it is:

Correct AnswerverifiedShow Answer

Assuming no other changes,if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion,the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified