Intro to Business - Chapter 15
Dakota Mining Company pays its bills and employees with checks drawn on a bank from another part of the country. Checks usually take about three days to clear the firm's account. _____ is the advantage gained during the check-clearing time.
Float
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
Credit cards:
are accurately described by all of the above
TD Ameritrade is a company that buys and sells stocks and bonds as well as providing its customers with advice on when to buy and when to sell. TD Ameritrade is an example of a _____, a type of nondepository financial institution.
brokerage firm
Finance companies make loans to people who could not get credit anywhere else. To compensate for taking this extra risk, finance companies:
charge higher interest rates than commercial banks do
Which of the following financial institutions is a not-for-profit institution?
credit union
To stimulate the economy, the Federal Reserve can:
lower the reserve requirement
The Federal Reserve controls the minimum amount that a purchaser of securities must deposit with a stock brokerage firm in order to purchase stock. This minimum amount is called the _____ requirement.
margin
For a college student who needs to buy an $80 textbook, the money she received from her grandmas to help purchase of school supplies would be used as a:
medium of exchange
A bank chartered by the Comptroller of Currency, a branch of the U.S. Treasury Department, is called a _____ bank.
national
Weeds, sand, and paper clips would not make good mediums of exchange because they lack the key characteristic of:
scarcity
Money market deposit accounts and certificates of deposit are officially called ______ deposits.
time
The Federal Deposit Insurance Corporation (FDIC):
insures deposits in commercial banks
In terms of financial intermediation, the couple who went to a bank and took out a $200,000 loan to buy a new house is an example of a:
demander of funds
The Banking Act of 1933 gave the Federal Reserve System the authority to:
do all of the above
When bank examiners conclude that a bank has serious financial problems, the FDIC can:
do any of the above
Cupcakes, hamburgers, and cut flowers would not make good mediums of exchange because they lack the key characteristic of:
durability
Thrift institutions were formed specifically to make home mortgage loans and to:
encourage household savings
A bank is engaged in _____ when it accepts the farmer's deposit of $127,000, and then makes a business loan of $50,000 to a small business owner.
financial intermediation
Competing against foreign banks can be difficult for U.S. banks because:
foreign banks are subject to fewer regulations than U.S. banks