This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 16 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 16 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Coins and paper money in people's pockets are ..... A) Included in both M1 and M2. B) Included in M2 but not in M1. C) Included in M1 but not in M2. D) Excluded from M1 and M2. Show Answer Correct Answer: A) Included in both M1 and M2. 2. Who has to confirm after the President appoints the managers of the fed? A) No one has to confirm. B) The Senate. C) The people. D) The Supreme Court Justice. Show Answer Correct Answer: B) The Senate. 3. The standard of value and a means of exchange or payment is A) Food. B) Financial. C) Money. D) Candy. Show Answer Correct Answer: C) Money. 4. A monetary system in which paper money and coins are equal to the value of a certain amount of gold A) Money Supply. B) Gold Standard. C) National Bank. D) Bank. Show Answer Correct Answer: B) Gold Standard. 5. According to monetary neutrality if the price level raises by 5 and the value of of $ 200 game system was equal to 10 prime steaks, how many prime steaks would be required to be equal to the $ 1000 price of the game system? A) 2. B) 25. C) 50. D) 10. Show Answer Correct Answer: D) 10. 6. The ability to use an asset as a medium of exchange describes its ..... A) Portability. B) Scarcity. C) Durability. D) Liquidity. Show Answer Correct Answer: D) Liquidity. 7. Which of the following is a type of banking service that allows your principal to grow through the adding in of interest? A) Credit account. B) Savings account. C) Charge account. D) Basic checking account. Show Answer Correct Answer: B) Savings account. 8. The ability of money to be accepted by all parties in a transaction A) Portability. B) Store of Value. C) Medium of Exchange. D) Measure of Value. Show Answer Correct Answer: C) Medium of Exchange. 9. Banks use savings account deposits to: A) Make their services and products attractive for new depositors. B) Pay for employee special projects. C) Give loans to consumers and businesses. D) Improve the quality of life in low-income communities. Show Answer Correct Answer: C) Give loans to consumers and businesses. 10. This is a system where a reserve, or part, of a deposit needs to be kept on hand. A) Fractional reserve system. B) Multiplier effect. C) Aggregate Measures. D) Primary reserve. Show Answer Correct Answer: A) Fractional reserve system. 11. An economy was a barter economy. After using money in exchange, we can expect that(1) there will be a common measure of value of goods and services.(2) there will be a lower degree of specialisation in production.(3) transaction costs will decrease. A) (1) and (2) only. B) (1) and (3) only. C) (2) and (3) only. D) (1), (2) and (3). Show Answer Correct Answer: B) (1) and (3) only. 12. Money allows the comparison of different values and this function is referred to as ..... A) Medium of exchange. B) Store of value. C) Measure of value. D) Standard of deferred payment. Show Answer Correct Answer: C) Measure of value. 13. Hiram Wakefield began a bank in ..... A) Colorado. B) North Carolina. C) California. D) None of above. Show Answer Correct Answer: A) Colorado. 14. The currency created by the central bank is called A) Bank money. B) High powered money. C) Money. D) Money supply. Show Answer Correct Answer: B) High powered money. 15. Which describes a bear market? A) Stocks are staying the same. B) Some stocks are going up and some are going down. C) Most stock prices are rising. D) Most stock prices are falling. Show Answer Correct Answer: D) Most stock prices are falling. 16. Which of these is an example of a discretionary fiscal measure? A) State unemployment programs. B) Tax cuts. C) Social Security. D) Automatic stabilizers. Show Answer Correct Answer: B) Tax cuts. 17. What is the primary way banks earn a profit? A) Borrowing money from the Fed. B) Collecting interest on loans made to customers. C) Selling Piggy Banks. D) Charging fees for services. Show Answer Correct Answer: B) Collecting interest on loans made to customers. 18. Commodity money can only work in A) A highly regulated system. B) A simple economic system. C) A financial industry. D) A complex economic system. Show Answer Correct Answer: B) A simple economic system. 19. This type of card allows you to withdraw money directly out of your checking account to pay for things ..... A) Gift Card. B) E-Card. C) Credit Card. D) Debit Card. Show Answer Correct Answer: D) Debit Card. 20. The central bank of the United States is the: A) Comptroller's Bank. B) United States National Bank. C) Federal Reserve Banking System. D) U.S. Treasury Bank. Show Answer Correct Answer: C) Federal Reserve Banking System. 21. Which of the following is the apex bank of India? A) PNB. B) HDFC. C) RBI. D) SBI. Show Answer Correct Answer: C) RBI. 22. Money must be able to withstand the wear and tear of many people using it. A) Limited Supply. B) Divisibility. C) Durability. D) Acceptability. Show Answer Correct Answer: C) Durability. 23. If the money supply increases from $ 4000 to $ 6000, and the real output of video games is 50. What will happen to the price level? A) It will increase to $ 110. B) It will decrease to $ 80. C) It stays the same. D) It will increase to $ 120. Show Answer Correct Answer: D) It will increase to $ 120. 24. The Federal Reserve System started in A) 1923. B) 1910. C) 1932. D) 1913. Show Answer Correct Answer: D) 1913. 25. To make a profit banks charge ..... interest on the money they loan than the interest they pay on savings accounts. A) Less. B) Equal. C) Not as much. D) More. Show Answer Correct Answer: D) More. 26. Anything used as a medium of exchange A) Interest. B) Taxes. C) Inflation. D) Money. Show Answer Correct Answer: D) Money. 27. Calculate the LRR, if initial deposits of Rs. 200 crore lead to creation of total deposits of 1600 crore . A) 12.5%. B) 10%. C) 15%. D) None of these. Show Answer Correct Answer: A) 12.5%. 28. Which institution perform the activity of credit creation A) COMMERCIAL BANK. B) Central bank. C) Both. D) None of these. Show Answer Correct Answer: A) COMMERCIAL BANK. 29. Financial intermediaries include A) Savings and loan associations, credit unions, and pension funds. B) Stockbrokers, brokerage firms, and speculators. C) All buyers, savers, traders, and investors. D) Financial asset markets and the stock exchange. Show Answer Correct Answer: A) Savings and loan associations, credit unions, and pension funds. 30. Transfer of value has become easier with A) Evolution of money. B) Storage of money. C) Measure of value. D) All of these. Show Answer Correct Answer: A) Evolution of money. ← 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