This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 11 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is an example of representative money? A) An IOU note. B) A fur coat. C) Gold earrings. D) Diamonds. Show Answer Correct Answer: A) An IOU note. 2. What does the fractional reserve system mean? A) Banks keep a small portion of deposits & loan the rest. B) Banks use fiat money as well as coins. C) Banks report daily to the Federal Reserve. D) Banks use cash and debit transactions. Show Answer Correct Answer: A) Banks keep a small portion of deposits & loan the rest. 3. When people can take their money with them easily A) Durability. B) Uniformity. C) Portability. D) Divisibility. Show Answer Correct Answer: C) Portability. 4. When the money supply increases, nominal interest rate will A) Decrease. B) Increase. C) Shift left. D) Remain the same. Show Answer Correct Answer: A) Decrease. 5. If the reserve requirement is 8 percent, how much of a $ 100 deposit must be kept by a customer's bank and not loaned to other customers? A) $ 80.00. B) $ 92.00. C) $ 12.00. D) $ 8.00. Show Answer Correct Answer: D) $ 8.00. 6. One of the primary functions of financial institutions is: A) Offer incentives for investing. B) Create investment portfolios. C) Prepare taxes. D) Provide access to capital. Show Answer Correct Answer: D) Provide access to capital. 7. Who has the right of note issue? A) Government. B) Commercial Bank. C) Co-operative Bank. D) Central Bank. Show Answer Correct Answer: D) Central Bank. 8. During the Free Banking Era, bankin in the U.S. was dominated by which of the following? A) Small independent banks with no charters. B) The national bank of the U.S. C) State-chartered banks. D) Savings and loan banks. Show Answer Correct Answer: A) Small independent banks with no charters. 9. All of the following are examples of M2 EXCEPT A) Savings deposits. B) Demand deposits. C) Small denomination time deposits. D) The total of all M1. Show Answer Correct Answer: B) Demand deposits. 10. The common name for U.S. currency is: A) Green backs. B) Blue backs. C) Orange backs. D) Yellow backs. Show Answer Correct Answer: A) Green backs. 11. Antifederalists opposed the national bank because A) They thought national government would do a better job of regulating banks. B) They wanted ta uniform money suppply throughout the country. C) They wanted to be able to secure loans with foreign countries. D) They feared the wealthy would use it to increase their power. Show Answer Correct Answer: D) They feared the wealthy would use it to increase their power. 12. The Federal Reserve has a total of ..... districts. A) 13. B) 12. C) 11. D) 10. Show Answer Correct Answer: B) 12. 13. If the nominal interest raises from 4% to 7% then the A) Expected inflation fell by 3%. B) Real interest rate must rise. C) Real interest rate fell by 4%. D) Expected inflation rose by 3%. Show Answer Correct Answer: D) Expected inflation rose by 3%. 14. ..... is a U.S. government institution that provides insurance on depositor's accounts A) Congress. B) Department of the Interior. C) FDIC. D) Department of Homeland Security. Show Answer Correct Answer: C) FDIC. 15. Money thai is issued by the authority of the government is called- A) Full bodied money. B) Fait money. C) Fuduciary money. D) All the above. Show Answer Correct Answer: B) Fait money. 16. The Fed provides ..... to banks. A) Currency. B) Liquidity. C) Tax benefits. D) None of above. Show Answer Correct Answer: A) Currency. 17. Suppose the required reserve ratio is 20% and there is no currency drain. Then a $ 100 increase in the monetary base results in the banking system increasing the quantity of money by A) $ 1, 000. B) $ 400. C) $ 500. D) $ 80. E) $ 100. Show Answer Correct Answer: C) $ 500. 18. The Federal Reserve is responsible for implementing A) Monetary policy. B) Fiscal policy. C) Federal policy. D) Demand policy. Show Answer Correct Answer: A) Monetary policy. 19. When an individual is unable to repay a loan A) Liquidity. B) Speculation. C) Interest. D) Default. Show Answer Correct Answer: D) Default. 20. The Federal Reserve often sells government ..... A) Bonds. B) Notes. C) Both. D) None of above. Show Answer Correct Answer: C) Both. 21. The difference between representative money and fiat money is that A) Representative money is backed by silver or gold, ; fiat money is not. B) Fiat money is more durable than representative money. C) Representative money is worth more than fiat money. D) Fiat money is counted in coins; representative money is counted in paper dollars. Show Answer Correct Answer: A) Representative money is backed by silver or gold, ; fiat money is not. 22. In the Money Market graph, the A) Demand for money is perfectly elastic. B) Supply of money is perfectly inelastic. C) The price axis is labeled real interest rate. D) The supply curve is leaning. Show Answer Correct Answer: B) Supply of money is perfectly inelastic. 23. Money can withstand physical wear and tear A) Uniformity. B) Divisibility. C) Durability. D) Portability. Show Answer Correct Answer: C) Durability. 24. The Federal Reserve is the bank's ..... A) Government. B) Hospital. C) Bank. D) Lending institution. Show Answer Correct Answer: C) Bank. 25. American leaders in the early United States wanted to establish a stable banking system in order to A) Provide competition for merchant lenders. B) Promote international trade and economic growth. C) Help all Americans build wealth through savings accounts. D) Allow individual merchants to charge fees for loans and other services. Show Answer Correct Answer: B) Promote international trade and economic growth. 26. Which of these results from the implementation of a tight money policy? A) Decrease in interest rates. B) Increase in the price of credit. C) Decrease in the price of credit. D) Increase in wage-price controls. Show Answer Correct Answer: B) Increase in the price of credit. 27. What condition is neccessary for fiat money to work? A) Banks must hold enough gold to cover paper money they give out. B) Customers with checking accounts cannot earn interest. C) The government must control the money supply. D) Money owed by customers must be paid on time. Show Answer Correct Answer: C) The government must control the money supply. 28. As an investor if you wanted to diversify your retirement portfolio which financial product should you select . A) Stock. B) Mutual Fund. C) Bond. D) Bitcoin. Show Answer Correct Answer: B) Mutual Fund. 29. The ..... guarantees your bank deposits up to $ 250, 000? A) Chinese Government. B) The President. C) FDIC (Federal Deposit Insurance Corporation). D) The Bank. Show Answer Correct Answer: C) FDIC (Federal Deposit Insurance Corporation). 30. People can take their money with them easily. A) Divisibility. B) Portability. C) Durability. D) Uniformity. Show Answer Correct Answer: B) Portability. ← PreviousNext →Related QuizzesFinance QuizzesMoney And Banking Quiz 1Money And Banking Quiz 2Money And Banking Quiz 3Money And Banking Quiz 4Money And Banking Quiz 5Money And Banking Quiz 6Money And Banking Quiz 7Money And Banking Quiz 8Money And Banking Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books