BUSINESS PRINCIPLE (16)
Among the five standards for a useful form of money are ______. (Select all that apply) Multiple select question. (A) durability (B) uniqueness (C) abstractness (D) flexibility
A B
Which statements about commercial banks are true? (Select all that apply) Multiple select question. (A) Commercial banks are owned and controlled by its depositors. (B) Commercial banks make loans from the deposits of its customers. (C) Commercial banks do not seek to earn a profit. (D) Commercial banks are equally responsible to their depositors and borrowers.
B D
An independent agency of the U.S. government that insures bank deposits is the _________.
FDIC
The money supply term known as ______ includes coins and paper bills, demand deposits, share drafts, and traveler's checks.
M-1
The money supply term that refers to money that can be accessed quickly and easily is
M1
Generally speaking, commercial banks grant loans based on ______.
a borrower's creditworthiness
The amount of goods and services you can buy with a dollar in the global market ______
increases with a rising dollar value
S&Ls were originally set up to ______.
promote home ownership
The organization responsible for funding international economic development is ______.
the World Bank
The reserve requirement is ______. Multiple choice question. (A) the percentage of loans that must be made to keep a bank solvent (B) the percentage amount of a bank's checking and savings that must be kept in the bank (C) the amount of federal budget that must be spent through banking accounts (D) the number of experienced employees banks must keep on hand
B
A way to send transactions directly from one computer to another instead of using a paper check is through the use of ______. (Select all that apply) Multiple select questions. (A) Federal Reserve transfers (B) debit cards (C) electronic funds transfer (EFT) (D) money orders
B C
The National Credit Union Administration (NCUA) provides ______ for depositors in credit unions.
insurance
Banking is not just a domestic function anymore since it is influenced by ________ issues
international
When doing business internationally, a promise by a bank to pay the seller a given amount if certain conditions are met is a __________.
letter of credit
In international banking, a(n) ____________ of _______________ is a promise by a bank to pay the seller a given amount if certain conditions are met.
letter/credit
What people generally accept as payment for goods and services is called ______.
money
A device that can take the place of a credit card, debit card, driver's license, and other personal information is called a(n)
smart card
Credit unions are owned by ______.
the credit union's members
The FDIC, SAIF, and the NCUA were all created to ______. Multiple choice question. (A) protect money that is deposited in individual accounts (B) regulate competition among various types of financial institutions (C) regulate the banking industry from corruption (D) make sure that interest rates are kept from being too high or too low
A
Which statement about a falling dollar value in the global market is correct? Multiple choice question. (A) A falling dollar value means you cannot buy as many goods and services in the global market. (B) A falling dollar value means that there will be less goods available to buy in the global market. (C) A falling dollar value means the amount of goods and services you can buy in the global market increases. (D) A falling dollar value means that there will be more goods available to buy in the global market.
A
What were the effects of the lack of a banking system in early America? (Select all that apply) Multiple select question. (A) The barter system was commonplace. (B) Land banks were created. (C) Local governments often would issue currency. (D) Great Britain established local banks in America.
A B C
Which of the following are services provided by nonbanks? (Select all that apply) Multiple select question. (A) financial services (B) sell insurance (C) brokerage services (D) accept deposits
A B C
Which institutions are members of the U.S. banking system? (Select all that apply) Multiple select question. (A) commercial banks (B) savings and loans (C) Internet trading firms (D) credit unions (E) nonbanks that offer financial services (F) financial investment firms
A B D E
Today the World Bank lends most of its money to developing nations to ______. (Select all that apply) Multiple select question. (A) improve their quality of life (B) improve their productivity (C) decrease competition in the countries (D) decrease the impact of global regulations (E) raise their standard of living
A B E
A smart card is an electronic funds transfer tool that can serve as a(n) ______. (Select all that apply) Multiple select question. (A) credit card (B) insurance card (C) driver's license (D) debit card (E) investment tool
A C D
What organizations have been created to protect a depositor's funds? (Select all that apply) Multiple select question. (A) The Savings Association Insurance Fund (B) The National Pension Fund of America (C) The Federal Deposit Insurance Corporation (D) The National Credit Union Administration (E) The Mutual Savings Bank Insurance Fu
A C D
Which of the following would be included in the M-2 money supply? (Select all that apply) Multiple select question. (A) savings accounts (B) bond investments (C) certificates of deposit (D) money market accounts
A C D
Which of the following are considered to be part of the Federal Reserve? Multiple select questions. (A) Internal Revenue Service (B) Board of Governors (C) Federal Open Market Committee (D) Secretary of State
B C
Which statements are correct about banking? Multiple select question. (A) Banks are insulated from global economic problems. (B) Banking is now a global industry. (C) Issues around the world can influence banking on the local level. (D) Banks seldom operate outside their home country.
B C
What role did banks play in the banking crisis of 2008? Multiple choice question. (A) They did not offer loans to people who needed them. (B) They did not consult the government on the loans they granted. (C) They did not take creditworthiness into account when making loans. (D) They charged customers unusually high interest rates.
C
As a result of the Great Depression, Congress established deposit insurance to ______. Multiple choice question. (A) allow citizens to invest money in insurance companies (B) ensure that the checks of customers do not bounce (C) ensure the U.S. government has access to funds (D) make sure depositors did not lose money in a bank failure
D
If the Federal Reserve suddenly vastly increased the amount of money in circulation, it could lead to ______. Multiple select question. (A) disinflation (B) deflation (C) no difference in the economy (D) inflation
D
The saying "too much money chasing too few goods," is used to refer to ______. Multiple select questions. (A) an expansion (B) a recession (C) deflation (D) inflation
D
The _________ ________ is the organization that has the most power over the currency in the United States.
Federal Reserve
The organization/person in charge of the money supply in the United States is the ______.
Federal Reserve
The money supply term that includes readily available cash, checking and savings accounts, individual money market funds, and Certificates of Deposit is ______.
M-2
The term for the money supply that includes cash, checking accounts, Certificates of Deposit, money markets, and big deposits such as institutional money market funds is ______.
M-3
The money supply term that includes accounts that can be accessed quickly and easily and most savings accounts, mutual funds, and Certificates of Deposit is
M2
____________ is the most inclusive of the money supply definitions that include cash, checking, savings, and institutional money market funds.
M3
________ banking allows customers the ability to complete most transactions electronically without leaving home.
Online
_____ cards serve many different financial and personal functions using an electronic chip.
Smart
Another name for an electronic check is ______.
a debit card
A major problem during the Great Depression created by a weak banking system was ______.
a run on and closure of many banks
Commercial banks, savings and loans, credit unions, and non-banks are all considered to be a part of the U.S. _________ system
banking
A ___________ exchange is used to swap goods and services for other goods and services through the use of trade credits.
barter
A system where you can offer goods or services and get trade credits to buy other goods and services that you need is called a(n) ______ exchange.
barter
Because there was no banking system in the early days of the United States, colonists were forced to ________ for goods.
barter
The direct trading of goods and services for other goods and services is called
barter
The exchange of goods and services for other goods and services is referred to as ______.
bartering
A demand deposit is the technical name for a(n) __________ account since it is a means of paying for almost any purchase or transaction.
checking
The process of approving and processing ______ is expensive so bankers are always seeking way to make the system more efficient.
checks
Which of the following is included in the M-1 money supply?
checks
The check ________ function of the Federal Reserve enables banks to settle demand deposits between member banks.
clearing
The Federal Reserve banks serve as the national ________ for checks.
clearinghouses
A(n) __________ bank is a profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans.
commercial
One technological solution to reduce the cost and inefficiency of handling paper checks was introducing ______.
credit cards
In the United States ___________ _________ are nonprofit, member-owned cooperatives that offer most banking services to their members.
credit unions
NCUA is an agency that insures deposits held in ______.
credit unions
A _______ card serves the same function as a check by withdrawing funds from a checking account.
debit
A checking account is also referred to as a ______.
demand deposit
Nonbanks are financial organizations that accept no __________ but offer many of the services provided by regular banks.
deposits
The interest rate the Federal Reserve charges for loans made to its member banks is called the _____ rate.
discount
The World Bank is responsible for financing ______.
economic development
In a(n) __________ funds transfer system, transactions are sent directly from one computer to another.
electronic
When a company puts aside pension funds they are providing monies for ______.
employee retirement
When the Federal Reserve buys and sells government bonds it is ______.
engaging in open market operations
The federal reserve system has ___________ major parts
five
Banking has to be seen today as ______.
global in nature
A condition characterized by a continual rise in prices for goods and services is termed ______. Multiple select questions. (A) inflation (B) recession (C) expansion (D) deflation
inflation
In the past, objects such as salt, feathers, fur pelts, stones, rare shells, tea and horses have served as ______.
money
In the banking crisis of 2008, banks divided their portfolios of mortgages and sold them to other banks and organizations as ______.
mortgage-backed securities
One of the reasons for the banking crisis was that banks made questionable loans and resold them as ______.
mortgage-backed securities
Financial organizations that accept no deposits but offer many of the same services as regular banks are called ______.
nonbanks
A payroll debit card serves as a way to pay employees who are ______.
not part of the banking system
Customers can have access to most banking functions electronically, wherever the customer is located through the use of __________ banking
online
The M-3 (money supply) includes ______.
only M-2 and institutional money market funds
Firms use ______ as an alternative to cash to pay their employees who don't qualify for a debit or credit card—employees labeled "unbanked."
payroll debit cards
What are monies put aside by corporations and others for the retirement of their employees called?
pension funds
The characteristic of money that allows you to easily carry dollar bills and coins from your home to the grocery store and purchase the items that you need is called _______
portability
Along with the FDIC, the SAIF was created to ______.
protect people's savings from loss
The purpose of the Savings Association Insurance Fund (SAIF) is to
provide insurance for depositors
Often called "thrifts," this financial institution primarily offers checking and savings accounts and makes long-term loans for residential mortgages.
savings and loan association
Banks that sold mortgage-backed securities (MBSs) during the 2008 banking crisis thought the MBSs were safe because ______.
they were backed by homes that were mortgaged
