intro to business chapter 15

National banks:

are accurately described by all of the above

Finance companies that make loans to promising new businesses with little track record and to firms that are unable to get any more bank credit are _____ finance companies.

commercial

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

The Banking Act of 1933 gave the Federal Reserve System the authority to:

ban interest on demand deposits

The operating license for a commercial bank is called a(n):

bank charter

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

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

State banks are:

chartered by the state in which they are based

_____ are profit-oriented depository financial institutions that accept deposits, make business and consumer loans, invest in government and corporate securities, and provide other financial services.

commercial bank

The two types of finance companies are:

commercial finance companies and consumer finance companies

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

Which of the following financial institutions is a not-for-profit institution?

credit union

Cupcakes, hamburgers, and cut flowers would not make good mediums of exchange because they lack the key characteristic of:

durability

ATMs let customers of banks make deposits and withdrawals while in a shopping center or supermarket 24 hours a day. The letters ATM stand for:

automated teller machine

Items that groups of people use as money must be _____ to be acceptable mediums of exchange

scarce, divisible, portable, and durable

A checking account is also commonly referred to as a:

demand deposit

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

In the process of financial intermediation, households, businesses, and governments can all be are categorized as:

demanders of funds

Which of the following services would you expect a depository institution to offer?

electronic funds transfer

Thrift institutions were formed specifically to make home mortgage loans and to:

encourage household savings

Financial institutions act as intermediaries between suppliers and demanders of funds. They accept savers' deposits and invest them in such things as business loans or mortgages. This process is called:

financial intermediation

_____ benefits the check writer by allowing it to retain the funds until the funds are actually withdrawn from its account.

float

The Federal Deposit Insurance Corporation (FDIC):

insures deposits in commercial banks

About two-thirds of all U.S. commercial banks are chartered by the state in which they are based. The banks are called _____ banks.

state

Hal Silverstein has a savings account, also called a _____, at his local credit union.

time deposit

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 Federal Deposit Insurance Corporation (FDIC) insures deposits in commercial banks. The FDIC was created by the:

Banking Act of 1933

What are the broad categories of commercial banks in the United States?

state and national

A bank charter:

is an operating license for a commercial bank

Which of the following services would you NOT expect a depository institution to offer?

loans to individuals with poor credit

Thrift institutions were formed specifically to encourage household savings and to:

make home mortgage loans

For a college student who needs to buy an $80 textbook, the money she received from her parents for the purchase of school supplies would be used as a:

medium of exchange

Any object or objects that a group of people use to buy and sell goods and services is called:

money

______ is anything (regardless of form) that is acceptable as payment for goods and services.

money

One of the major financial burdens for many companies is the need to provide and maintain funds to provide benefits needed by former employees. One of the ways that Delta Airline tried to avoid bankruptcy was by reducing the payout from this fund because returns on investments were not keeping pace with the number of retirees and their benefit demands. This example reflects a problem with:

pension fund

Boulders, building trusses, and lead ingots would not make good mediums of exchange because they lack the key characteristic of:

portability

The power the Federal Reserve has to control credit terms on some loans made by banks and other lending institutions is called ______ controls.

selective credit