Ch16

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Measure of worth

A jeweler ASSESSES the VALUE of a flawless white diamond as considerably more than that of a rhinestone which function of money does this illustrate

Store of value

David is SAVING $25 a week towards getting a new truck which function of money does this illustrate

By geographical region south east northeast West etc.

How are the individual Federal Reserve Banks organized

Medium of exchange

Money frees society from a system of barter. In doing so money is performing which of the following functions

A commercial bank

Suppose aList of all American deposit institutions were created and aname chosen randomly from this list which of the following would the chosen institution most likely be

Build their cars in the United States and sell them in Canada

Toyota based in Japan would like to build a new factory and a new retail distribution center both or either of these may be built in the United States and in canada currently the US dollar is weak compared to the Canadian dollar assuming the decision does not affect the number of car sold which of the following arrangements would be most profitable

The economy is experiencing severe INFLATION and market activity is very low yet the financial institutions have a great deal of M-1 resources at their disposal that they are not investing

Under which of the following circumstances would the federal reserve system want to DECREASE the MONEY SUPPLY by increasing the discount rate

Letter of credit

When BUYING from a supplier in France LTD based in Cleveland Ohio has arranged for his bank to pay the supplier the cost of the desired material when it has passed customs in the United States which of the following terms is this type of BANK PROMISE called

Place of birth

Which of The following pieces of information is not required by the USA patriot act for Banks to collect for every customer

An increase in the discount rate will lower the overall Number of loans from The federal reserve banks to individual banks

Which of The following statements best describes why an increase in the discount rate often results in a decrease in the money supply

Units of money have relatively constant value

Which of the Best describes the STABILITY characteristic of money

Units of money do not expire after a certain time limit

Which of the following Best describes the DURABILITY CHARACTERISTIC of MONEY

Mutual savings banks and credit unions

Which of the following FINANCIAL INSTITUTIONS are considered to be OWNED BY their DEPOSITORS

Commercial banks

Which of the following INSTITUTIONS simplifies financial SETTLEMENT between buyers and sellers in different countries

The USA patriot act

Which of the following Laws has had significant effects in MAINTAINING BANK IDENTITY RECORDS

The president of the United States

Which of the following POLITICAL bodies of points the members of the board of governors for the federal reserve system

The FDIC can allow another Bank to take responsibility for the failed Banks liabilities through sale of the failed bank

Which of the following actions can Federal Deposit Insurance Company TAKE in the event of a FAILURE of one of its insured banks

How much currency is in circulation

Which of the following affects the value of money

It is light and easy to handle

Which of the following best describes the PORTABILITY characteristic of money

Aiding banks in conducting business and managing the US money supply and interest rates

Which of the following best describes two of the three primary functions of the Federal Reserve System

That the government Decrease spending in order to bring inflation under control

Which of the following describes the requirements that the international monetary fund has made on certain Developing countries

The check clearing for the 21st century act

Which of the following federal LAWS made TRANSACTIONS between banks significantly more efficient

Commercial banks

Which of the following financial institutions earn PROFITS from LOANS TAKEN from the funds in each of its DEPOSITORS ACCOUNT

Freddie Mac

Which of the following financial institutions was taken over by the federal housing finance agency when it was on the verge of financial failure

Taxation

Which of the following is NOT a PRIMARY TOOL for controlling the money supply

Units of money can be accurately matched with the value of goods

Which of the following is a consequence of the DIVISIBILITY characteristic of MONEY

Currency value of time deposit

Which of the following is not part of the M-1 supply

Credit card account

Which of the following is not part of the M-2 money supply

The resulting improvements will help increase the productive capacity and hence the international trade of certain developing countries

Which of the following is the main justification for the World Bank to fund national improvements by making lines to build roads in hospitals

A NEW DEPOSIT account will make MORE FUNDS AVAILABLE to GIVE OUT in LOANS

Which of the following reasons is the primary MOTIVATOR for a commercial BANK to acquire NEW DEPOSITORS

The ACH network is a not for profit association and this regulated by its independence from outside interest

Which of the following statements best describes how the automated clearing House network ACH maintains its integrity as a processor of electronic payments

They are backed by the US government

Which of the following statements best describes why US TREASURY SECURITIES have always been considered RISK-FREE investment

A decrease in reserve requirements give spanks more money to lend out

Which of the following statements best describes why a decrease in reserve requirements often results in an increase in the money supply

By taking deposits and loaning out these funds financial institutions expand the money supply

Which of the following statements best explains HOW FINANCIAL INSTITUTIONS CREATE MONEY

Since insurance companies also generate revenue from investments of premium payments market fluctuations may affect one's health insurance premium

Which of the following statements is true

ATM deposits

Which of the following transactions is not included among AuTOMAted clearinghouse payments


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