GBS 151 Test #2.3 Study Guide (Chapter 15)

Using borrowed money to increase profits (e.g. what the banks used in excess during the Great Recession) is called: - Financial leverage - Funding your business - Financial planning - All

Financial leverage

Which of the following is NOT one of the 3 tools used by the Federal Reserve System in managing the money supply? - Fiscal policy - Open market operations - Reserve requirements - Discount rate

Fiscal policy

Financial institutions act as intermediaries between suppliers and demanders of funds. They accept savers' deposits and invest them in such things as business loans or mortgages. This process is called: - Financial intermediation - Financial coordination - Financial equilibrium - Depository intermediaries - Intermediary banking

- Financial intermediation

Which of the following is considered a non-depository financial institution (that may offer some banking services - but does not accept deposits)? - Brokerage Firms - Commercial banks - Thrift institutions (such as Savings & Loans) - Credit unions

Brokerage firms

Which of the following is NOT considered a form of U.S. currency? - Credit cards - Cash - Money orders - Cashier's checks - Treasury checks

Credit cards

Although money has no intrinsic value, it is demanded throughout society. Among the reasons that money is demanded are: - All - It stores value - It can be used as a medium of exchange - It can be used as a measurement of value of goods and/or services

All

The Federal Deposit Insurance Corporation (FDIC): - All - Is an independent, quasi-public corporation - Is backed by the full faith and credit of the United States government - Insures deposits in commercial banks and thrift institutions up to a ceiling of $250,000 per account

All

The Federal Reserve uses a variety of monetary policy tools to achieve which of the following goal(s)? - All - Full employment - Sustainable economic growth - Price stability

All

Which of the following statements is TRUE about money and financial institutions? - All - There are now more U.S. dollars used outside the country - One of the Fed's important functions is making check cashing easier - One of the Fed's important functions is distributing currency

All

Which of the following statements is NOT true about money and financial institutions? - U.S. banks have few advantages in overseas markets - Fintech services will continue to disrupt the banking industry, helping them to better serve customers by innovating and streamlining their business practices - International banks operating within the United States have a substantial impact on the local economy - Mobile financial apps will continue to be a strategic advantage - Online and mobile banking services will become more popular

U.S. banks have few advantages in overseas markets