Week 3 - Chapters 1, 4 and 5 Quiz

Question 1

2 out of 2 points

A basic requirement for an effective financial system is a monetary system that performs which of the following financial functions?

Answers:	formation and transferring of money
	storing gold and silver to back up money
	creating jobs
	transferring real assets

Question 2

2 out of 2 points

Examples of automatic stabilizers are (choose one)

Answers:	open market operations.
	changes in the discount rate.
	unemployment insurance.
	issuance of currency.

Question 3

2 out of 2 points

Before the Federal Reserve System was created, a large part of the reserves of commercial banks was

Answers:	in the form of state and federal government bonds.
	deposited with the United States Treasury.
	held as deposits with large city banks.
	held as cash in their vaults.

Question 4

2 out of 2 points

Banking system reserves plus currency held by the nonbank public is referred to as the

Answers:	money supply.
	monetary base.
	monetary multiplier.
	monetary requirement.

Question 5

2 out of 2 points

Functions of the monetary system include which of the following:

Answers:	creating money
	designing money
	storing money
	exchanging money for goods and services

Question 6

2 out of 2 points

__________ are electronic markets in which banks and institutional traders buy and sell various currencies on behalf of businesses and other clients.

Answers:	Debt securities markets
	Bond markets
	Foreign exchange markets
	Equity Securities markets
	Derivative securities markets

Question 7

2 out of 2 points

______________ behavior refers to how an individual or organization treats others legally, fairly, and honestly.

Answers:	Principal-agent
	Stakeholder
	Responsible
	Ethical
	none of the above

Question 8

2 out of 2 points

Continuing federal programs that stabilize economic activity are called

Answers:	transfer payments.
	automatic stabilizers.
	social insurance programs.
	safety net programs.

Question 9

0 out of 2 points

Involves preparing financial statements for tax purposes.

Answers:	Cash management analyst
	Capital expenditures analyst
	Credit analyst
	Cost analyst
	Tax analyst

Question 10

2 out of 2 points

The effect of an increase of required reserves by the Fed is

Answers:	a decrease in loanable funds of depository institutions.
	a decrease in interest rates.
	an increase of excess reserves.
	to stimulate activity in the home construction field.

Question 11

2 out of 2 points

If the reserve requirement is 25% and $5,000 is injected into the banking system, the maximum expansion in the money supply would be

Answers:	$1,250.
	$20,000.
	$6,667.
	$4,000.

Question 12

2 out of 2 points

Almost all Treasury disbursements are made by

Answers:	checks drawn directly on the U.S. Treasury.
	check drawn against deposits at commercial banks in large cities.
	drafts drawn on member banks.
	checks drawn against deposits at Federal Reserve Banks.

Question 13

2 out of 2 points

Our country’s economic policy actions are directed toward all of the following goals except

Answers:	balance in the federal budget.
	high employment.
	price stability.
	economic growth.

Question 14

2 out of 2 points

The National Banking Acts of 1863 and 1864 were

Answers:	totally eliminated under the Federal Reserve Act of 1913.
	were modified to permit greater flexibility of operations under the Federal Reserve Act of 1913.
	were unaffected by the Federal Reserve Act of 1913.
	found unconstitutional by the Supreme Court.

Question 15

0 out of 2 points

Involves analyzing the investment potential of real property and securities for pension fund holdings.

Answers:	Insurance broker
	Research analyst
	Real estate broker
	Mortgage analyst

Question 16

2 out of 2 points

The purpose of Regulation Z is to

Answers:	make consumers aware of the costs of alternative forms of credit.
	prohibit garnishment.
	encourage depository institutions to help meet the credit needs of their communities for housing and other purposes.
	regulate the overseas activities of member banks of the Federal Reserve System.

Question 17

2 out of 2 points

Which of the following is not a part of the financial environment?

Answers:	Institutions and markets
	Investments
	Stocks
	Financial management

Question 18

2 out of 2 points

The seven-member board of the Federal Reserve that sets monetary policy is called

Answers:	the Federal Reserve Open Market Committee.
	the Federal Reserve Board of Governors.
	the Federal Reserve Advisory Committee.
	the Federal Market Advisory Committee.

Question 19

2 out of 2 points

Also known as the Fed.

Answers:	Government National Mortgage Association
	Federal National Mortgage Association
	Federal Home Loan Mortgage Corporation
	Federal Reserve System

Question 20

2 out of 2 points

During the 2007 – 2009 financial crisis, ___________ and __________, who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

Answers:	Fannie Mae; Freddie Mac
	the Federal Treasury; the Federal Reserve
	Morgan Stanley; Smith Barney
	Washington Mutual; Lehman Brothers

Week 3 – Chapters 1, 4 and 5 Quiz

Question 1

Question 2

Question 3

Question 4

Question 5

Question 6

Question 7

Question 8

Question 9

Question 10

Question 11

Question 12

Question 13

Question 14

Question 15

Question 16

Question 17

Question 18

Question 19

Question 20

Total price (USD) $12.99

Question 1

Question 2

Question 3

Question 4

Question 5

Question 6

Question 7

Question 8

Question 9

Question 10

Question 11

Question 12

Question 13

Question 14

Question 15

Question 16

Question 17

Question 18

Question 19

Question 20

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