One major advantage of credit cards used for transactions is that they: A) Offer

Question

One major advantage of credit cards used for transactions is that they: A) Offer discounts on most transactions
B) Charge a lower interest rate than other means of payment
C) Give consumers the lowest prices on products purchased
D) Allow consumers to coordinate timing and payment for purchases
2. The Federal Open Market Committee (FOMC): A) Provides advice on banking stability to the Fed
B) Monitors regulatory banking laws for member banks
C) Sets policy on the sale and purchase of government bonds by the Fed
D) Follows the actions and operations of financial markets to keep them open and competitive
3. As of January 2010, slightly more than half of the money supply (M1) was in the form of: A) Currency
B) Checkable deposits
C) Gold coins and bars
D) Savings deposits
4. Generally speaking, the greater the amount of assets people hold in the form of near-monies, the: A) Greater is their willingness to spend out of their money incomes
B) Less is their willingness to spend out of their money incomes
C) Greater is the money supply M1
D) Less is the money supply M2
5. Which of the following "backs" the value of money in the United States? A) The gold stored in the Federal Reserve Bank of New York
B) The acceptability of it as a medium of exchange
C) The willingness of foreign government to hold U.S. dollars
D) The size of the budget surplus in the U.S. government
6. The "bail-out" money that went to giant financial institutions like Citibank and Goldman Sachs, along with General Motors and Chrysler, came from the A) American Recovery and Reinvestment Act
B) Troubled Assets Relief Program
C) Primary Dealer Credit Facility
D) Term Securities Lending Facility
7. The bail-out money given to the car companies GM and Chrysler came from the Fed acting in its role as "lender of last resort". A) TRUE
B) FALSE
8. The consolidation in the financial industry into fewer and larger firms: A) Progressed further in the Financial Crisis of 2007-2008
B) Halted in the Financial Crisis of 2007-2008
C) Slowed down in the Financial Crisis of 2007-2008
D) Was reversed in the Financial Crisis of 2007-2008
9. Store gift cards and university meal cards are perfect examples of debit cards. A) TRUE
B) FALSE
10. When a bank's loans are written off, it means that the bank's: A) Reserves are reduced, while its debt increases
B) Reserves rise along with its debt
C) Reserves fall along with its debt
D) Reserves shrink, whereas its debt remains the same
11. The Financial Crisis of 2007-2008 halted the consolidation in the U.S. financial industry that had caused a declining number but increasing size of firms in the industry prior to the crisis. A) TRUE
B) FALSE
12. The so-called mortgage-backed securities are all of the following, except: A) Before the crisis, they were believed by many banks to be a way of reducing loan risks
B) Before the crisis, they played a major role in broadening home ownership in America
C) They were linkages that spread instability across many financial institutions
D) Their use was strongly discouraged by the Federal government
13. The Federal Reserve System performs the following functions, except: A) Issuing the paper currency in the economy
B) Providing banking services to the general public
C) Providing financial services to the Federal government
D) Lending money to banks and thrifts
14. Money supply M1 does not include the currency held by: A) Households in their wallets or purses
B) Business firms
C) Commercial banks
D) State and local governments
15. Checkable deposits are included in: A) M1 but not in M2
B) M2 but not in M1
C) both M1 and M2
D) neither M1 nor M2
16. Money functions as a store of value if it allows you to: A) Measure the value of goods in a reliable way
B) Make exchanges in a more efficient manner
C) Delay purchases until you want the goods
D) Increase your confidence in money
17. Holding the money deposits of businesses and households and making loans to the public are the basic functions of: A) District banks of the Federal Reserve System
B) Commercial banks and thrift institutions
C) The Open Market Committee and the Board of Governors
D) The Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation
18. Members of the Federal Reserve Board of Governors are: A) Appointed by Congress to staggered 14-year terms
B) Selected by the Federal Open Market Committee for 4-year terms
C) Appointed by the President to staggered 14-year terms
D) Selected by each of the Federal Reserve banks for 4-year terms
19. The use of a credit card is most similar to: A) Paying with a check
B) An ACH (automatic clearinghouse) transaction
C) Purchasing a certificate of deposit
D) Obtaining a short-term loan
20. How many Federal Reserve Banks are there? A) 1
B) 6
C) 12
D) 24
21. Use the following list to answer the question about the money supply Items.

1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits

Refer to the above table. Which items are included in the M2 money supply, but not the M1 money supply? A) 1 and 7
B) 3 and 5
C) 1 and 2
D) 1, 2, and 5
22. Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? A) Unit of account
B) Store of value
C) Medium of exchange
D) Medium of deferred payment
23. The M1 money supply is composed of: A) All coins and paper money held by the general public and the banks
B) Bank deposits of households and business firms
C) Bank deposits and mutual funds
D) Checkable deposits and currency in circulation
24. The Federal Reserve System is the institution that issues the U.S. paper currency or dollar bills. A) TRUE
B) FALSE
25. The Federal backing for money in the United States comes from: A) Providing sufficient quantities of precious metals such as gold and silver to cover the amount of paper money in circulation
B) Pledging physical assets, such as land, natural resources, and public buildings as collateral for outstanding currency
C) Controlling the money supply in order to keep the value of money relatively stable over time
D) Protecting checkable deposits at financial institutions with deposit guarantees
26. Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is: A) A way of reducing risk though diversification
B) Well-understood by financial analysts and managers who engaged in it
C) Considered shady by legitimate financial institutions
D) Still only a minor portion of the modern financial system
27. Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis. A) TRUE
B) FALSE
28. Checkable deposits are money because they are: A) Legal tender
B) Fiat money
C) Acceptable as payment
D) Token money
29. Money eliminates the need for a coincidence of wants in trading primarily through its role as a: A) Unit of account
B) Medium of exchange
C) Store of value
D) Medium of deferred payment
30. When the Fed acts as a "lender of last resort", like it did in the financial crisis of 2007-2008, it is performing its role of: A) Controlling the money supply
B) Setting the reserve requirements
C) Being the bankers' bank
D) Providing for check clearing and collection

One major advantage of credit cards used for transactions is that they: A) Offer discounts on most transactions
B) Charge a lower interest rate than other means of payment
C) Give consumers the lowest prices on products purchased
D) Allow consumers to coordinate timing and payment for purchases
2. The Federal Open Market Committee (FOMC): A) Provides advice on banking stability to the Fed
B) Monitors regulatory banking laws for member banks
C) Sets policy on the sale and purchase of government bonds by the Fed
D) Follows the actions and operations of financial markets to keep them open and competitive
3. As of January 2010, slightly more than half of the money supply (M1) was in the form of: A) Currency
B) Checkable deposits
C) Gold coins and bars
D) Savings deposits
4. Generally speaking, the greater the amount of assets people hold in the form of near-monies, the: A) Greater is their willingness to spend out of their money incomes
B) Less is their willingness to spend out of their money incomes
C) Greater is the money supply M1
D) Less is the money supply M2
5. Which of the following "backs" the value of money in the United States? A) The gold stored in the Federal Reserve Bank of New York
B) The acceptability of it as a medium of exchange
C) The willingness of foreign government to hold U.S. dollars
D) The size of the budget surplus in the U.S. government
6. The "bail-out" money that went to giant financial institutions like Citibank and Goldman Sachs, along with General Motors and Chrysler, came from the A) American Recovery and Reinvestment Act
B) Troubled Assets Relief Program
C) Primary Dealer Credit Facility
D) Term Securities Lending Facility
7. The bail-out money given to the car companies GM and Chrysler came from the Fed acting in its role as "lender of last resort". A) TRUE
B) FALSE
8. The consolidation in the financial industry into fewer and larger firms: A) Progressed further in the Financial Crisis of 2007-2008
B) Halted in the Financial Crisis of 2007-2008
C) Slowed down in the Financial Crisis of 2007-2008
D) Was reversed in the Financial Crisis of 2007-2008
9. Store gift cards and university meal cards are perfect examples of debit cards. A) TRUE
B) FALSE
10. When a bank's loans are written off, it means that the bank's: A) Reserves are reduced, while its debt increases
B) Reserves rise along with its debt
C) Reserves fall along with its debt
D) Reserves shrink, whereas its debt remains the same
11. The Financial Crisis of 2007-2008 halted the consolidation in the U.S. financial industry that had caused a declining number but increasing size of firms in the industry prior to the crisis. A) TRUE
B) FALSE
12. The so-called mortgage-backed securities are all of the following, except: A) Before the crisis, they were believed by many banks to be a way of reducing loan risks
B) Before the crisis, they played a major role in broadening home ownership in America
C) They were linkages that spread instability across many financial institutions
D) Their use was strongly discouraged by the Federal government
13. The Federal Reserve System performs the following functions, except: A) Issuing the paper currency in the economy
B) Providing banking services to the general public
C) Providing financial services to the Federal government
D) Lending money to banks and thrifts
14. Money supply M1 does not include the currency held by: A) Households in their wallets or purses
B) Business firms
C) Commercial banks
D) State and local governments
15. Checkable deposits are included in: A) M1 but not in M2
B) M2 but not in M1
C) both M1 and M2
D) neither M1 nor M2
16. Money functions as a store of value if it allows you to: A) Measure the value of goods in a reliable way
B) Make exchanges in a more efficient manner
C) Delay purchases until you want the goods
D) Increase your confidence in money
17. Holding the money deposits of businesses and households and making loans to the public are the basic functions of: A) District banks of the Federal Reserve System
B) Commercial banks and thrift institutions
C) The Open Market Committee and the Board of Governors
D) The Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation
18. Members of the Federal Reserve Board of Governors are: A) Appointed by Congress to staggered 14-year terms
B) Selected by the Federal Open Market Committee for 4-year terms
C) Appointed by the President to staggered 14-year terms
D) Selected by each of the Federal Reserve banks for 4-year terms
19. The use of a credit card is most similar to: A) Paying with a check
B) An ACH (automatic clearinghouse) transaction
C) Purchasing a certificate of deposit
D) Obtaining a short-term loan
20. How many Federal Reserve Banks are there? A) 1
B) 6
C) 12
D) 24
21. Use the following list to answer the question about the money supply Items.

1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits

Refer to the above table. Which items are included in the M2 money supply, but not the M1 money supply? A) 1 and 7
B) 3 and 5
C) 1 and 2
D) 1, 2, and 5
22. Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? A) Unit of account
B) Store of value
C) Medium of exchange
D) Medium of deferred payment
23. The M1 money supply is composed of: A) All coins and paper money held by the general public and the banks
B) Bank deposits of households and business firms
C) Bank deposits and mutual funds
D) Checkable deposits and currency in circulation
24. The Federal Reserve System is the institution that issues the U.S. paper currency or dollar bills. A) TRUE
B) FALSE
25. The Federal backing for money in the United States comes from: A) Providing sufficient quantities of precious metals such as gold and silver to cover the amount of paper money in circulation
B) Pledging physical assets, such as land, natural resources, and public buildings as collateral for outstanding currency
C) Controlling the money supply in order to keep the value of money relatively stable over time
D) Protecting checkable deposits at financial institutions with deposit guarantees
26. Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is: A) A way of reducing risk though diversification
B) Well-understood by financial analysts and managers who engaged in it
C) Considered shady by legitimate financial institutions
D) Still only a minor portion of the modern financial system
27. Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis. A) TRUE
B) FALSE
28. Checkable deposits are money because they are: A) Legal tender
B) Fiat money
C) Acceptable as payment
D) Token money
29. Money eliminates the need for a coincidence of wants in trading primarily through its role as a: A) Unit of account
B) Medium of exchange
C) Store of value
D) Medium of deferred payment
30. When the Fed acts as a "lender of last resort", like it did in the financial crisis of 2007-2008, it is performing its role of: A) Controlling the money supply
B) Setting the reserve requirements
C) Being the bankers' bank
D) Providing for check clearing and collection

One major advantage of credit cards used for transactions is that they: A) Offer discounts on most transactions
B) Charge a lower interest rate than other means of payment
C) Give consumers the lowest prices on products purchased
D) Allow consumers to coordinate timing and payment for purchases
One major advantage of credit cards used for transactions is that they: A) Offer discounts on most transactions
B) Charge a lower interest rate than other means of payment
C) Give consumers the lowest prices on products purchased
D) Allow consumers to coordinate timing and payment for purchases
One major advantage of credit cards used for transactions is that they: 2. The Federal Open Market Committee (FOMC): A) Provides advice on banking stability to the Fed
B) Monitors regulatory banking laws for member banks
C) Sets policy on the sale and purchase of government bonds by the Fed
D) Follows the actions and operations of financial markets to keep them open and competitive
2. The Federal Open Market Committee (FOMC): A) Provides advice on banking stability to the Fed
B) Monitors regulatory banking laws for member banks
C) Sets policy on the sale and purchase of government bonds by the Fed
D) Follows the actions and operations of financial markets to keep them open and competitive
The Federal Open Market Committee (FOMC): 3. As of January 2010, slightly more than half of the money supply (M1) was in the form of: A) Currency
B) Checkable deposits
C) Gold coins and bars
D) Savings deposits
3. As of January 2010, slightly more than half of the money supply (M1) was in the form of: A) Currency
B) Checkable deposits
C) Gold coins and bars
D) Savings deposits
As of January 2010, slightly more than half of the money supply (M1) was in the form of: 4. Generally speaking, the greater the amount of assets people hold in the form of near-monies, the: A) Greater is their willingness to spend out of their money incomes
B) Less is their willingness to spend out of their money incomes
C) Greater is the money supply M1
D) Less is the money supply M2
4. Generally speaking, the greater the amount of assets people hold in the form of near-monies, the: A) Greater is their willingness to spend out of their money incomes
B) Less is their willingness to spend out of their money incomes
C) Greater is the money supply M1
D) Less is the money supply M2
Generally speaking, the greater the amount of assets people hold in the form of near-monies, the: 5. Which of the following "backs" the value of money in the United States? A) The gold stored in the Federal Reserve Bank of New York
B) The acceptability of it as a medium of exchange
C) The willingness of foreign government to hold U.S. dollars
D) The size of the budget surplus in the U.S. government
5. Which of the following "backs" the value of money in the United States? A) The gold stored in the Federal Reserve Bank of New York
B) The acceptability of it as a medium of exchange
C) The willingness of foreign government to hold U.S. dollars
D) The size of the budget surplus in the U.S. government
Which of the following "backs" the value of money in the United States? 6. The "bail-out" money that went to giant financial institutions like Citibank and Goldman Sachs, along with General Motors and Chrysler, came from the A) American Recovery and Reinvestment Act
B) Troubled Assets Relief Program
C) Primary Dealer Credit Facility
D) Term Securities Lending Facility
6. The "bail-out" money that went to giant financial institutions like Citibank and Goldman Sachs, along with General Motors and Chrysler, came from the A) American Recovery and Reinvestment Act
B) Troubled Assets Relief Program
C) Primary Dealer Credit Facility
D) Term Securities Lending Facility
The "bail-out" money that went to giant financial institutions like Citibank and Goldman Sachs, along with General Motors and Chrysler, came from the 7. The bail-out money given to the car companies GM and Chrysler came from the Fed acting in its role as "lender of last resort". A) TRUE
B) FALSE
7. The bail-out money given to the car companies GM and Chrysler came from the Fed acting in its role as "lender of last resort". A) TRUE
B) FALSE
The bail-out money given to the car companies GM and Chrysler came from the Fed acting in its role as "lender of last resort". 8. The consolidation in the financial industry into fewer and larger firms: A) Progressed further in the Financial Crisis of 2007-2008
B) Halted in the Financial Crisis of 2007-2008
C) Slowed down in the Financial Crisis of 2007-2008
D) Was reversed in the Financial Crisis of 2007-2008
8. The consolidation in the financial industry into fewer and larger firms: A) Progressed further in the Financial Crisis of 2007-2008
B) Halted in the Financial Crisis of 2007-2008
C) Slowed down in the Financial Crisis of 2007-2008
D) Was reversed in the Financial Crisis of 2007-2008
The consolidation in the financial industry into fewer and larger firms: 9. Store gift cards and university meal cards are perfect examples of debit cards. A) TRUE
B) FALSE
9. Store gift cards and university meal cards are perfect examples of debit cards. A) TRUE
B) FALSE
Store gift cards and university meal cards are perfect examples of debit cards. 10. When a bank's loans are written off, it means that the bank's: A) Reserves are reduced, while its debt increases
B) Reserves rise along with its debt
C) Reserves fall along with its debt
D) Reserves shrink, whereas its debt remains the same
10. When a bank's loans are written off, it means that the bank's: A) Reserves are reduced, while its debt increases
B) Reserves rise along with its debt
C) Reserves fall along with its debt
D) Reserves shrink, whereas its debt remains the same
When a bank's loans are written off, it means that the bank's: 11. The Financial Crisis of 2007-2008 halted the consolidation in the U.S. financial industry that had caused a declining number but increasing size of firms in the industry prior to the crisis. A) TRUE
B) FALSE
11. The Financial Crisis of 2007-2008 halted the consolidation in the U.S. financial industry that had caused a declining number but increasing size of firms in the industry prior to the crisis. A) TRUE
B) FALSE
The Financial Crisis of 2007-2008 halted the consolidation in the U.S. financial industry that had caused a declining number but increasing size of firms in the industry prior to the crisis. 12. The so-called mortgage-backed securities are all of the following, except: A) Before the crisis, they were believed by many banks to be a way of reducing loan risks
B) Before the crisis, they played a major role in broadening home ownership in America
C) They were linkages that spread instability across many financial institutions
D) Their use was strongly discouraged by the Federal government
12. The so-called mortgage-backed securities are all of the following, except: A) Before the crisis, they were believed by many banks to be a way of reducing loan risks
B) Before the crisis, they played a major role in broadening home ownership in America
C) They were linkages that spread instability across many financial institutions
D) Their use was strongly discouraged by the Federal government
The so-called mortgage-backed securities are all of the following, except: 13. The Federal Reserve System performs the following functions, except: A) Issuing the paper currency in the economy
B) Providing banking services to the general public
C) Providing financial services to the Federal government
D) Lending money to banks and thrifts
13. The Federal Reserve System performs the following functions, except: A) Issuing the paper currency in the economy
B) Providing banking services to the general public
C) Providing financial services to the Federal government
D) Lending money to banks and thrifts
The Federal Reserve System performs the following functions, except: 14. Money supply M1 does not include the currency held by: A) Households in their wallets or purses
B) Business firms
C) Commercial banks
D) State and local governments
14. Money supply M1 does not include the currency held by: A) Households in their wallets or purses
B) Business firms
C) Commercial banks
D) State and local governments
Money supply M1 does not include the currency held by: 15. Checkable deposits are included in: A) M1 but not in M2
B) M2 but not in M1
C) both M1 and M2
D) neither M1 nor M2
15. Checkable deposits are included in: A) M1 but not in M2
B) M2 but not in M1
C) both M1 and M2
D) neither M1 nor M2
Checkable deposits are included in: 16. Money functions as a store of value if it allows you to: A) Measure the value of goods in a reliable way
B) Make exchanges in a more efficient manner
C) Delay purchases until you want the goods
D) Increase your confidence in money
16. Money functions as a store of value if it allows you to: A) Measure the value of goods in a reliable way
B) Make exchanges in a more efficient manner
C) Delay purchases until you want the goods
D) Increase your confidence in money
Money functions as a store of value if it allows you to: 17. Holding the money deposits of businesses and households and making loans to the public are the basic functions of: A) District banks of the Federal Reserve System
B) Commercial banks and thrift institutions
C) The Open Market Committee and the Board of Governors
D) The Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation
17. Holding the money deposits of businesses and households and making loans to the public are the basic functions of: A) District banks of the Federal Reserve System
B) Commercial banks and thrift institutions
C) The Open Market Committee and the Board of Governors
D) The Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation
Holding the money deposits of businesses and households and making loans to the public are the basic functions of: 18. Members of the Federal Reserve Board of Governors are: A) Appointed by Congress to staggered 14-year terms
B) Selected by the Federal Open Market Committee for 4-year terms
C) Appointed by the President to staggered 14-year terms
D) Selected by each of the Federal Reserve banks for 4-year terms
18. Members of the Federal Reserve Board of Governors are: A) Appointed by Congress to staggered 14-year terms
B) Selected by the Federal Open Market Committee for 4-year terms
C) Appointed by the President to staggered 14-year terms
D) Selected by each of the Federal Reserve banks for 4-year terms
Members of the Federal Reserve Board of Governors are: 19. The use of a credit card is most similar to: A) Paying with a check
B) An ACH (automatic clearinghouse) transaction
C) Purchasing a certificate of deposit
D) Obtaining a short-term loan
19. The use of a credit card is most similar to: A) Paying with a check
B) An ACH (automatic clearinghouse) transaction
C) Purchasing a certificate of deposit
D) Obtaining a short-term loan
The use of a credit card is most similar to: 20. How many Federal Reserve Banks are there? A) 1
B) 6
C) 12
D) 24
20. How many Federal Reserve Banks are there? A) 1
B) 6
C) 12
D) 24
How many Federal Reserve Banks are there? 21. Use the following list to answer the question about the money supply Items.

1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits

Refer to the above table. Which items are included in the M2 money supply, but not the M1 money supply? A) 1 and 7
B) 3 and 5
C) 1 and 2
D) 1, 2, and 5
21. Use the following list to answer the question about the money supply Items.

1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits

Refer to the above table. Which items are included in the M2 money supply, but not the M1 money supply? A) 1 and 7
B) 3 and 5
C) 1 and 2
D) 1, 2, and 5
Use the following list to answer the question about the money supply Items.

1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits

Refer to the above table. Which items are included in the M2 money supply, but not the M1 money supply? 22. Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? A) Unit of account
B) Store of value
C) Medium of exchange
D) Medium of deferred payment
22. Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? A) Unit of account
B) Store of value
C) Medium of exchange
D) Medium of deferred payment
Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? 23. The M1 money supply is composed of: A) All coins and paper money held by the general public and the banks
B) Bank deposits of households and business firms
C) Bank deposits and mutual funds
D) Checkable deposits and currency in circulation
23. The M1 money supply is composed of: A) All coins and paper money held by the general public and the banks
B) Bank deposits of households and business firms
C) Bank deposits and mutual funds
D) Checkable deposits and currency in circulation
The M1 money supply is composed of: 24. The Federal Reserve System is the institution that issues the U.S. paper currency or dollar bills. A) TRUE
B) FALSE
24. The Federal Reserve System is the institution that issues the U.S. paper currency or dollar bills. A) TRUE
B) FALSE
The Federal Reserve System is the institution that issues the U.S. paper currency or dollar bills. 25. The Federal backing for money in the United States comes from: A) Providing sufficient quantities of precious metals such as gold and silver to cover the amount of paper money in circulation
B) Pledging physical assets, such as land, natural resources, and public buildings as collateral for outstanding currency
C) Controlling the money supply in order to keep the value of money relatively stable over time
D) Protecting checkable deposits at financial institutions with deposit guarantees
25. The Federal backing for money in the United States comes from: A) Providing sufficient quantities of precious metals such as gold and silver to cover the amount of paper money in circulation
B) Pledging physical assets, such as land, natural resources, and public buildings as collateral for outstanding currency
C) Controlling the money supply in order to keep the value of money relatively stable over time
D) Protecting checkable deposits at financial institutions with deposit guarantees
The Federal backing for money in the United States comes from: 26. Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is: A) A way of reducing risk though diversification
B) Well-understood by financial analysts and managers who engaged in it
C) Considered shady by legitimate financial institutions
D) Still only a minor portion of the modern financial system
26. Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is: A) A way of reducing risk though diversification
B) Well-understood by financial analysts and managers who engaged in it
C) Considered shady by legitimate financial institutions
D) Still only a minor portion of the modern financial system
Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is: 27. Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis. A) TRUE
B) FALSE
27. Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis. A) TRUE
B) FALSE
Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis. 28. Checkable deposits are money because they are: A) Legal tender
B) Fiat money
C) Acceptable as payment
D) Token money
28. Checkable deposits are money because they are: A) Legal tender
B) Fiat money
C) Acceptable as payment
D) Token money
Checkable deposits are money because they are: 29. Money eliminates the need for a coincidence of wants in trading primarily through its role as a: A) Unit of account
B) Medium of exchange
C) Store of value
D) Medium of deferred payment
29. Money eliminates the need for a coincidence of wants in trading primarily through its role as a: A) Unit of account
B) Medium of exchange
C) Store of value
D) Medium of deferred payment
Money eliminates the need for a coincidence of wants in trading primarily through its role as a: 30. When the Fed acts as a "lender of last resort", like it did in the financial crisis of 2007-2008, it is performing its role of: A) Controlling the money supply
B) Setting the reserve requirements
C) Being the bankers' bank
D) Providing for check clearing and collection

30. When the Fed acts as a "lender of last resort", like it did in the financial crisis of 2007-2008, it is performing its role of: A) Controlling the money supply
B) Setting the reserve requirements
C) Being the bankers' bank
D) Providing for check clearing and collection
When the Fed acts as a "lender of last resort", like it did in the financial crisis of 2007-2008, it is performing its role of:
One major advantage of credit cards used for transactions is that they: A) Offer discounts on most transactions
B) Charge a lower interest rate than other means of payment
C) Give consumers the lowest prices on products purchased
D) Allow consumers to coordinate timing and payment for purchases
2. The Federal Open Market Committee (FOMC): A) Provides advice on banking stability to the Fed
B) Monitors regulatory banking laws for member banks
C) Sets policy on the sale and purchase of government bonds by the Fed
D) Follows the actions and operations of financial markets to keep them open and competitive
3. As of January 2010, slightly more than half of the money supply (M1) was in the form of: A) Currency
B) Checkable deposits
C) Gold coins and bars
D) Savings deposits
4. Generally speaking, the greater the amount of assets people hold in the form of near-monies, the: A) Greater is their willingness to spend out of their money incomes
B) Less is their willingness to spend out of their money incomes
C) Greater is the money supply M1
D) Less is the money supply M2
5. Which of the following "backs" the value of money in the United States? A) The gold stored in the Federal Reserve Bank of New York
B) The acceptability of it as a medium of exchange
C) The willingness of foreign government to hold U.S. dollars
D) The size of the budget surplus in the U.S. government
6. The "bail-out" money that went to giant financial institutions like Citibank and Goldman Sachs, along with General Motors and Chrysler, came from the A) American Recovery and Reinvestment Act
B) Troubled Assets Relief Program
C) Primary Dealer Credit Facility
D) Term Securities Lending Facility
7. The bail-out money given to the car companies GM and Chrysler came from the Fed acting in its role as "lender of last resort". A) TRUE
B) FALSE
8. The consolidation in the financial industry into fewer and larger firms: A) Progressed further in the Financial Crisis of 2007-2008
B) Halted in the Financial Crisis of 2007-2008
C) Slowed down in the Financial Crisis of 2007-2008
D) Was reversed in the Financial Crisis of 2007-2008
9. Store gift cards and university meal cards are perfect examples of debit cards. A) TRUE
B) FALSE
10. When a bank's loans are written off, it means that the bank's: A) Reserves are reduced, while its debt increases
B) Reserves rise along with its debt
C) Reserves fall along with its debt
D) Reserves shrink, whereas its debt remains the same
11. The Financial Crisis of 2007-2008 halted the consolidation in the U.S. financial industry that had caused a declining number but increasing size of firms in the industry prior to the crisis. A) TRUE
B) FALSE
12. The so-called mortgage-backed securities are all of the following, except: A) Before the crisis, they were believed by many banks to be a way of reducing loan risks
B) Before the crisis, they played a major role in broadening home ownership in America
C) They were linkages that spread instability across many financial institutions
D) Their use was strongly discouraged by the Federal government
13. The Federal Reserve System performs the following functions, except: A) Issuing the paper currency in the economy
B) Providing banking services to the general public
C) Providing financial services to the Federal government
D) Lending money to banks and thrifts
14. Money supply M1 does not include the currency held by: A) Households in their wallets or purses
B) Business firms
C) Commercial banks
D) State and local governments
15. Checkable deposits are included in: A) M1 but not in M2
B) M2 but not in M1
C) both M1 and M2
D) neither M1 nor M2
16. Money functions as a store of value if it allows you to: A) Measure the value of goods in a reliable way
B) Make exchanges in a more efficient manner
C) Delay purchases until you want the goods
D) Increase your confidence in money
17. Holding the money deposits of businesses and households and making loans to the public are the basic functions of: A) District banks of the Federal Reserve System
B) Commercial banks and thrift institutions
C) The Open Market Committee and the Board of Governors
D) The Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation
18. Members of the Federal Reserve Board of Governors are: A) Appointed by Congress to staggered 14-year terms
B) Selected by the Federal Open Market Committee for 4-year terms
C) Appointed by the President to staggered 14-year terms
D) Selected by each of the Federal Reserve banks for 4-year terms
19. The use of a credit card is most similar to: A) Paying with a check
B) An ACH (automatic clearinghouse) transaction
C) Purchasing a certificate of deposit
D) Obtaining a short-term loan
20. How many Federal Reserve Banks are there? A) 1
B) 6
C) 12
D) 24
21. Use the following list to answer the question about the money supply Items.

1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits

Refer to the above table. Which items are included in the M2 money supply, but not the M1 money supply? A) 1 and 7
B) 3 and 5
C) 1 and 2
D) 1, 2, and 5
22. Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? A) Unit of account
B) Store of value
C) Medium of exchange
D) Medium of deferred payment
23. The M1 money supply is composed of: A) All coins and paper money held by the general public and the banks
B) Bank deposits of households and business firms
C) Bank deposits and mutual funds
D) Checkable deposits and currency in circulation
24. The Federal Reserve System is the institution that issues the U.S. paper currency or dollar bills. A) TRUE
B) FALSE
25. The Federal backing for money in the United States comes from: A) Providing sufficient quantities of precious metals such as gold and silver to cover the amount of paper money in circulation
B) Pledging physical assets, such as land, natural resources, and public buildings as collateral for outstanding currency
C) Controlling the money supply in order to keep the value of money relatively stable over time
D) Protecting checkable deposits at financial institutions with deposit guarantees
26. Securitization, the process of forming new securities by bundling or slicing up groups of securities like mortgages and bonds, is: A) A way of reducing risk though diversification
B) Well-understood by financial analysts and managers who engaged in it
C) Considered shady by legitimate financial institutions
D) Still only a minor portion of the modern financial system
27. Subprime mortgages, which played a central role in the Financial Crisis of 2007-2008, had been strongly encouraged and supported by the government before the crisis. A) TRUE
B) FALSE
28. Checkable deposits are money because they are: A) Legal tender
B) Fiat money
C) Acceptable as payment
D) Token money
29. Money eliminates the need for a coincidence of wants in trading primarily through its role as a: A) Unit of account
B) Medium of exchange
C) Store of value
D) Medium of deferred payment
30. When the Fed acts as a "lender of last resort", like it did in the financial crisis of 2007-2008, it is performing its role of: A) Controlling the money supply
B) Setting the reserve requirements
C) Being the bankers' bank
D) Providing for check clearing and collection

Explanation / Answer

1 -D
2- C
3- C D must be wrong, there is not much on a world scale that leaves A, B but either could be correct if 50-50

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