Ch16
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
