macro final 3
Cisco is considering opening a financial institution that accepts savings deposits from only its employees and makes loans to only its employees. The best description of this financial institution is that it is a A) credit union. B) commercial bank. C) savings and loan association. D) savings bank. E) federal government chartered credit bank.
A
The largest category of commercial banks' assets is A) loans. B) reserves. C) currency. D) securities. E) checkable deposits.
A
Which of the following is a thrift institution? A) a savings and loan association B) a money market fund C) a commercial bank D) a loan institution E) the Federal Reserve
A
Which of the following lists includes only banks' assets? A) liquid assets, loans, securities, and reserves B) reserves, savings deposits, securities, and loans C) reserves, securities, liquid assets, and savings deposits D) securities, reserves, checkable deposits, and liquid assets E) reserves, checkable deposits, securities, and loans
A
A commercial bank's reserves are equal to the amount of A) the bank's deposits. B) the bank's government securities. C) the bank's loans. D) currency in the bank's vault plus the balance on its reserve account at a Federal Reserve Bank. E) only the currency in its vault.
D
Banks earn a profit by A) keeping as many reserves on hand as possible. B) making loans at a lower interest rate than the rate that they offer on their deposits. C) charging an interest rate on their depositors' accounts. D) making loans at a higher interest rate than the rates that they offer on their deposits. E) not paying interest on their reserves.
D
Banks generally earn the highest interest rate A) on service charges on individuals' checking accounts. B) by making loans to business firms. C) by making mortgage loans to individuals. D) by making credit card loans. E) by buying government securities.
D
Which of the following is a thrift institution? i. a credit union. ii. the Fed iii. a savings bank. A) i only B) ii only C) iii only D) Both i and iii E) i, ii, and iii
D
When goldsmiths issued receipts to gold owners, and those gold receipts circulated while gold stayed in the goldsmiths' safes, A) the gold receipts were considered money because they were used as a means of payment. B) an infant banking system developed in sixteenth century Europe. C) fiat money was created. D) money was invented. E) Both A and B are correct.
E
Which of the following accept deposits from or sell shares to the general public? i. money market funds ii. thrift institutions iii. commercial banks A) i only B) ii only C) iii only D) Both ii and iii E) i, ii, and iii
E
Which of the following is NOT held as an asset by banks? A) reserves B) loans C) securities D) currency in the banks' vaults E) checkable deposits
E
Which statement is most correct about the types of deposits a commercial bank can accept? A) A commercial bank accepts checking, savings and time deposits. B) A commercial bank can only accept checking deposits from commercial enterprises. C) A commercial bank accepts savings and time deposits, but not checking deposits. D) A commercial bank does not accept deposits but sells shares. E) A commercial bank can accept loan deposits, reserve deposits, and checkable deposits.
A
When a commercial bank receives a deposit, it must keep part of the deposit as cash reserves to satisfy its A) securities and loans. B) required reserves. C) excess reserves. D) interbank loans. E) loan requirements.
B
A commercial bank is defined as A) any institution that accepts deposits. B) a firm that is chartered to accept deposits and make loans. C) the institution that sets regulations for commercial activities. D) a firm that obtains funds by selling shares and then buys U.S. Treasury bills. E) any institution that makes loans.
B
A commercial bank's main goal is to A) provide loans to its customers. B) maximize the wealth of its stockholders. C) help the government when it needs money. D) lend money to the Federal Reserve banks. E) open checking accounts.
B
A bank has checkable deposits of $1,000,000, loans of $600,000, and government securities of $400,000. If the required reserve ratio is 5 percent, the amount of required reserves is A) $100,000. B) $30,000. C) $50,000. D) $80,000. E) $20,000.
C
A commercial bank's reserves are A) bonds issued by the U.S. government that are very safe. B) the provision of funds to businesses and individuals. C) currency in its vault plus the balance on its reserve account at a Federal Reserve Bank. D) savings and time deposits. E) its loans.
C
In 2011 banks kept reserves equal to about ________ of their assets. A) 75 percent. B) 25 percent C) 13 percent D) 50 percent E) 37 percent
C
The goal of a commercial bank is to A) establish good regulations for commercial activities. B) make only safe, no-risk loans. C) maximize its stockholders' wealth. D) minimize its taxes paid to state governments. E) accept only deposits made in money.
C
Which of the following are assets of commercial banks? i. reserves ii. loans iii. deposits A) i only B) ii only C) i and ii D) ii and iii E) i, ii, and iii
C
Which of the following describe the "invention" of banking? A) The British Empire created a banking system to fund its exploration of the New World. B) Members of the New York Stock Exchange founded the Bank of America in the 1700s. C) Goldsmiths in the sixteenth century issued gold receipts which entitled its owners to reclaim their gold on demand. D) Clergy in the Renaissance created the banking system to help further the growth of the church. E) The United States government founded the Federal Reserve in 1913.
C