Intro to Business Ch. 15

The U.S. money supply is composed of: coins, paper money, and treasury bills currency, demand deposits, and checking accounts currency, demand deposits, and time deposits stocks, demand deposits, and checking accounts checking accounts, bonds, and savings accounts

currency, demand deposits, and time deposits

Ruth Hu recently inherited $200,000. She has invested the inherited money in real estate and government securities. Hu is using her money as a: medium of exchange commodity of exchange store of value measure of value measure of wealth

store of value

Money market deposit accounts and certificates of deposit are officially called ______ deposits.

time

Hal Silverstein has a savings account, also called a _____, at his local credit union. demand deposit credit deposit storage deposit marketable securities time deposit

time deposit

_____ are deposits at a bank or other financial institution that pay interest but cannot be withdrawn on demand without penalty. Commercial deposits Marketable securities Time deposits Checking accounts Demand deposits

Time deposits

A checking account is also commonly referred to as a:

demand deposit

Bo Riley pays his rent and utility bills each month by writing checks. Riley is using a _____ account. time deposit federal deposit certificate of deposit currency demand deposit

demand deposit

When The Bank of Bank County borrows funds from the Federal Reserve; the rate the Fed charges the commercial bank is called the _____ rate. going reserve prime commercial bank discount

discount

Which of the following is an activity performed by the Federal Reserve System as it carries out its monetary policy? providing tax refunds controlling the stock exchange insuring credit card balances loaning money to consumers distributing currency

distributing currency

For a college student who needs to buy an $80 textbook, the money she received from her parents for the purchase of school supplies would be used as a: measure of value store of value commodity of exchange medium of exchange measure of wealth

medium of exchange

The most important function of the Federal Reserve System is carrying out ______ policy. monetary tax fiscal inflationary spending

monetary

_____ is cash held in the form of coins and paper money.

Currency

Credit cards: do not replace money defer payment to a later point in time are used as a substitute for cash and checks are sometimes referred to as plastic money are accurately described by all of the above

are accurately described by all of the above

In its role as lender to member banks, the Federal Reserve is called the: national bank government exchange customized bank national creditor banker's bank

banker's bank

The most frequently used and the most flexible tool that the Federal Reserve has that it can use to change the economic environment is: discount rate general fund deposits prime rate open market operations reserve requirement

open market operations

Federal Reserve banks must hold a certain portion of their deposits in reserve. This percentage is called the: prime monetary percentage interest rate average discount requirement reserve requirement margin requirement

reserve requirement

The three principal tools of the Federal Reserve System are: reserve requirements, discount rate, and open market operations discount rate, prime rate, and open market operations tax rate, margin requirements, and discount rate reserve requirements, consumer rate, and prime rate open market operations, discount rate, and tax rate

reserve requirements, discount rate, and open market operations

The power the Federal Reserve has to control credit terms on some loans made by banks and other lending institutions is called ______ controls. selective debit selective credit demand credit interbank feedback secure credit

selective credit

The purchase or sale of U.S. government bonds by the Federal Reserve to stimulate or slow down the economy is called: an open market operation manipulating the discount rate making a general fund deposit/withdrawal a base market operation a prime transaction

an open market operation

To stimulate the economy, the Federal Reserve can: buy stocks listed on the New York Stock Exchange raise the discount rate sell government bonds on the open market lower the reserve requirement raise the prime rate

lower the reserve requirement