Week 3 – Chapters 1, 4 and 5 Quiz
-
Question 1
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
Examples of automatic stabilizers are (choose one)
Answers: open market operations.
changes in the discount rate.
unemployment insurance.
issuance of currency.
-
Question 3
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
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
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
__________ 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
______________ 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
Continuing federal programs that stabilize economic activity are called
Answers: transfer payments.
automatic stabilizers.
social insurance programs.
safety net programs.
-
Question 9
Involves preparing financial statements for tax purposes.
Answers: Cash management analyst
Capital expenditures analyst
Credit analyst
Cost analyst
Tax analyst
-
Question 10
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
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
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
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
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
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
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
Which of the following is not a part of the financial environment?
Answers: Institutions and markets
Investments
Stocks
Financial management
-
Question 18
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
Also known as the Fed.
Answers: Government National Mortgage Association
Federal National Mortgage Association
Federal Home Loan Mortgage Corporation
Federal Reserve System
-
Question 20
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