Chapter 15 Quiz
The _____ is an independent, quasi-public corporation backed by the full faith and credit of the U.S. government that insures deposits in commercial banks and thrift institutions for up to a ceiling of $250,000 per account.
Federated Deposit Investment Corporation (FDIC)
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
Adam Hassib works for the Federal Deposit Insurance Corporation. He arrives unannounced at member banks where he conducts audits of managerial and financial practices. Hassib is a:
bank examiner
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
State banks are:
chartered by the state in which they are based
When Hadley Jones wanted to buy a truck so he could get to and from his job in a nearby community, his credit rating was poor. Jones found that the only place he could get a loan was from a(n) _____ finance company.
consumer
Financial institutions can be divided into two broad categories. These are ______ institutions.
depository and nondepository
The _____ characteristic of money is revealed by the fact that a dollar can be converted into four quarters or ten times.
divisibility
Cupcakes, hamburgers, and cut flowers would not make good mediums of exchange because they lack the key characteristic of:
durability
Money is used as:
all of the above
Which of the following statements about credit unions is true?
None of the above statements about credit unions is true.
_____ are two types of thrift institutions.
Savings banks and savings and loan associations
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
The most frequently used and the most flexible tool that the Federal Reserve has that it can use to change the economic environment is:
open market operations
Boulders, building trusses, and lead ingots would not make good mediums of exchange because they lack the key characteristic of:
portability
The three principal tools of the Federal Reserve System are:
reserve requirements, discount rate, and open market operations
Weeds, sand, and paper clips would not make good mediums of exchange because they lack the key characteristic of:
scarcity
Ruth Hu recently inherited $200,000. She has invested the inherited money in real estate and government securities. Hu is using her money as a:
store of value
Money market deposit accounts and certificates of deposit are officially called ______ deposits.
time
Hal Silverstein has a savings account, also called a _____, at his local credit union.
time deposit