chapter 20 banks

The abbreviation for the independent agency of the US that insures bank deposits is the

FDIC

The __ __ is responsible for financing international economic development and is sometimes called the International Bank for Reconstruction and Developmenet

World bank

`A certificate of deposit (CD) is also known as

a time deposit (savings)

Which of the following are services provided by nonbanks? a) investment services b) accept deposits c) brokerage services d) accept loan application

a, c and d.

A banker's s__ is a promise that the bank will pay some specified amount at a particular time with no condition

acceptance.

A banker's acceptance is a promise to pay a certain amount

at a certain time with no conditions.

Major services that banks provide to international business include

banker's acceptance currency exchange letters of credit.

The TARP (Troubled Assets Relief Program) was designed as a

banking relief package.

Which is the correct statement about banks and their customers

banks are equally responsible to their depositors and borrowers

the check clearing role of the Federal Reserve allows

banks to settle the check payments between banks in different parts of the country.

An accountant who installs financial software for a beauty software to earn "trade credit" which the accountant usese to have painter paint her house is an example of a(n) __ exchange

bartere

A place where you can put goods or services into a system and get trade credits for other goods and services that you need is called a

bater exchange.

the banking crisis was crated by failures in:

both private and government sectors

A demand deposit is the technical name for a __ account since it is a means of paying for almost any purchase or transaction

checking

The check __ function of the Federal Reserve enable banks to settle demand deposits between member banks.

clearing

The federal reserve serve as the national __ for checks

clearnighouse.

Organizations that are becoming more involved in lending include

commercial credit companies brokerage firms

The methods the Federal Reserve uses to manage the eocnomy include all Except

control the federal budger

Receall that a __ deposit is a credit added to a bank account electronically in place of a check that reduces the cost of processing a paper check

direct deposit.

The interest rate the Fed charges for loans to member banks is called the __ rate

discount

"Lender of last resort" is a name given to the __ __ __ because it was created to assit other banks within the united states

federal reserve system

Banking has to be seen today

global in nature.

The Federal Reserve's Open Market Committee

is a policy making body is composed of the Board of Governors and members of the Reserve banks

The first banks created in the early days of America to aid farmers were called __ banks

land

Effects of the lack of a banking system in earl America included the fact that

land banks were created the barter system was commonplace local government often would issue currency.

When doing business internationally, a promise by a bank to pay the seller a given amount if certain conditions are met is a ___

letter of credit.

The best readon for the Federal Reserve to control the money supply is to

manage the prices of goods and services.

The following have played major parts in the debate on the US economy throughout hisotyr

money on the gold standard national banks

One of the reasons for the banking crisis was that banks made questionable loans and resold them as

mortgage-backed securities.

The difference between banks and similiar nonbank entities is that

nonbanks cannot accept deposits

A letter of credit is a promise by a bank to:

pay the seller a given amount if certain conditions are met.

nonbank entities that influence the financial economy as much as bank do include

pension funds brokerge firms life insurance companies

If a bank were to fail, the role of the FDIC would be to arrange to have the bank's accounts trasnferred to another bank or

reimburse depositors up to 250,000

Banks that contributed to the real estate collapse often did not look at a customer's ability to ___

repay loans

A financial insitution that accpets checking/saving deposits and provies ehome mortages is a __ and __ association

saving and loan

Insitituoisn are membmers of the US banking system

saving and loans nonbanks that offer financial services commercial banks

M-2 examples

savings account certificate of deposit money market accounts

Reserve requirement

the percentage amount of a bank's checking and saving that must be kept in the bank.

Which is correct concerning credit unions

they are tax-exempt organizations they are member-owned they are nonprofit organizations

Which of the following are considered to be one of the parts of the Federal Reserve

Board of governors federal open market commitee