Chapter 10 Boyd Test
The money in checking accounts is referred to as A: a demand deposit. B: a money supply. C: fractional reserve banking. D: interest.
A: a demand deposit.
Money that has value because the government has ordered that it is an acceptable means to pay debts is referred to as A: fiat money. B: commodity money. C: representative money. D: uniformity
A: fiat money.
A banker exchanges bank notes for silver and gold money then leaves town and disappears. This is a A: fraud. B: wildcat. C: bank run. D: greenback.
A: fraud.
"Specie" is a term used as early as the 1600s for A: gold and silver coins. B: paper currency. C: goldsmiths' receipts. D: tobacco.
A: gold and silver coins.
What is an example of commodity money? A: precious stones B: currency C: coins D: a tractor
A: precious stones
What is the simple interest of a loan for $1,000 with 5% interest after 3 years? A: $50 B: $150 C: $1,050 D: $1,150
B: $150
A dollar bill typically lasts A: 6 months in circulation. B: 1 year in circulation. C: 2 years in circulation. D: 3 years in circulation.
B: 1 year in circulation.
Which Act abolished the independence of the savings and loan industry and transferred insurance responsibilities to the Federal Deposit Insurance Corporation (FDIC)? A: Federal Reserve Act B: Financial Institutions Reform, Recovery, and Enforcement Act C: National Banking Act of 1863 D: National Banking Act of 1864
B: Financial Institutions Reform, Recovery, and Enforcement Act
The Antifederalist movement, which supported a decentralized banking system, was led by A: Alexander Hamilton. B: Thomas Jefferson. C: Aaron Burr. D: Andrew Jackson.
B: Thomas Jefferson
"Principal" is the A: ability to be used as, or directly converted to, cash. B: amount of money borrowed. C: failure to pay back a loan. D: price paid for the use of borrowed money.
B: amount of money borrowed.
"Objects that have value because the holder can exchange them for something else of value" defines A: fiat money. B: commodity money. C: representative money. D: portability.
B: commodity money.
The fractional banking system A: only works if there are a limited number of banks. B: ensures growth in the economy. C: makes banking more secure. D: prevents excessive defaults.
B: ensures growth in the economy.
Barter is A: a means for comparing the values of goods and services. B: the direct exchange of one set of goods or services for another. C: anything that serves as a medium of exchange, a unit of account, and a store of value. D: something that keeps its value if it is stored rather than used.
B: the direct exchange of one set of goods or services for another.
Which of the following is an example of an informal bank? A: A bank that is not incorporated. B: A bank that is not a member of a central bank. C: A merchant who stores money for customers. D: An individual who loans money to friends.
C: A merchant who stores money for customers.
Which of these currencies became worthless by the end of the Civil War? A: greebacks B: demand notes C: Confederate currency D: Union currency
C: Confederate currency
A bank chartered, or licensed, by the national government is called A: the central bank. B: a member bank. C: a national bank. D: the Federal Reserve.
C: a national bank.
Which of the following does NOT belong in the M2 category? A: money market mutual funds B: near money C: currency held in bank vaults D: deposits in savings
C: currency held in bank vaults
"Default" refers to the A: ability to be used as, or directly converted to, cash. B: amount of money borrowed. C: failure to pay back a loan. D: price paid for the use of borrowed money.
C: failure to pay back a loan.
The ability to be used as, or directly converted to, cash is A: default. B: the money supply. C: liquidity. D: interest.
C: liquidity
Which of the following is an example of money as a store of value? A: comparing the costs of two vacations B: appraising a wedding ring C: making money at a garage sale and saving it D: researching car prices online
C: making money at a garage sale and saving it
A bank that belongs to the Federal Reserve System is called a A: central bank. B: member bank. C: national bank. D: local bank.
C: national bank.
"Objects that have value in themselves and that are also used as money" is the definition for A: fiat money. B: commodity money. C: representative money. D: money.
C: representative money.
The government agency that covers customer deposits if a bank fails is the A: Federal Reserve System. B: central bank. C: member bank. D: Federal Deposit Insurance Corporation (FDIC).
D: Federal Deposit Insurance Corporation (FDIC).
The central banking system for the United States that was set up in 1913 is known as the A: central bank system. B: member bank system. C: national bank system. D: Federal Reserve System.
D: Federal Reserve System.
A NOW account is a type of A: savings account that works similarly to money market accounts. B: checking account offered by credit unions only in the Northeast. C: savings account that yields higher interest. D: checking account that pays interest.
D: checking account that pays interest.
Which one of the following is NOT one of the four most common ways people can save money in banks? A: checking accounts B: money market accounts C: certificates of deposit D: fractional reserves
D: fractional reserves
What is the name for a monetary system in which paper money and coins are equal to the value of a certain amount of gold? A: Federal Reserve note B: Federal Reserve System C: greenback D: gold standard
D: gold standard
The price paid for the use of borrowed money is referred to as the A: liquidity. B: default. C: principal. D: interest.
D: interest.
Anything that is used to determine value during the exchange of goods and services is a A: unit of account. B: barter. C: store of value. D: medium of exchange.
D: medium of exchange.
For a traveler, paper currency would be preferable to coins because of A: limited supply. B: acceptability. C: uniformity. D: portability.
D: portability.