This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 18 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 18 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is NOT a use of money? A) As a unit of account. B) As a store of value. C) As a medium of exchange. D) As a means of barter. Show Answer Correct Answer: D) As a means of barter. 2. Who was the leading Federalist that proposed chartering the First Bank on the United States in 1791? A) Alexander Hamilton. B) Thomas Jefferson. C) George Washington. D) DeWitt Clinton. Show Answer Correct Answer: A) Alexander Hamilton. 3. This is the organization which directs and controls the activities of the FED. (The folks that control everything.) A) The Board of Governors. B) The president. C) Congress. D) The cabinet. Show Answer Correct Answer: A) The Board of Governors. 4. What is the equation of exchange? A) MV=PQ=GDP. B) Excess=Actual-Required. C) 1/MPS. D) 1/RR. Show Answer Correct Answer: A) MV=PQ=GDP. 5. A line of credit for checks your account can't cover. A) Endorsement. B) Overdraft protection. C) Canceled check. D) Stop payment. Show Answer Correct Answer: B) Overdraft protection. 6. The amount banks hold beyond required reserve; amount that banks can lend. A) Multiplier. B) Expansionary Effect. C) Reserve Requirement. D) Excess Reserves. Show Answer Correct Answer: D) Excess Reserves. 7. Uniformity of currency means that it is A) Easily divided. B) Easy to count and measure. C) Accepted by everyone in a society. D) Scarce. Show Answer Correct Answer: B) Easy to count and measure. 8. Fiat money is accepted as payment because ..... A) It is backed by silver. B) It has separate value as another resource. C) The government says it must be accepted. D) None of above. Show Answer Correct Answer: C) The government says it must be accepted. 9. As commercial banks keep more excess reserves, money creation A) Decreases. B) Remains the same. C) Could either increase or decrease. D) Increases. Show Answer Correct Answer: A) Decreases. 10. What is a prospectus? A) A pool of momey from various investors. B) A report for possible investors. C) A collection of financial assets. D) A report for an individual's investments. Show Answer Correct Answer: B) A report for possible investors. 11. Which of the following is NOT an example of M1 money? A) Currency. B) Mutual fund. C) A checking account. D) Travelers' checks. Show Answer Correct Answer: B) Mutual fund. 12. ..... is a designation printed on paper currency that says it must be accepted as payment A) Barter. B) Fiat. C) Legal tender. D) Specie. Show Answer Correct Answer: C) Legal tender. 13. Which term describes the act of swapping items in exchange for other items in the absence of money? A) Negotiation. B) Unit of account. C) Double coincidence of wants. D) Bartering. Show Answer Correct Answer: D) Bartering. 14. Refers to the turn over rate, or how often money is used on average in a given year. A) Monetary Growth Rule. B) Monetary Policy. C) Real Output. D) Velocity. Show Answer Correct Answer: D) Velocity. 15. What is the main purpose of the FDIC? A) To make sure that commerical and investment banks do not fail. B) To make sure that customers do not lose money if a bank fails. C) To make sure that banks charge a fair amount of interests on loans. D) To make sure that the government has enough gold to cover its expenses. Show Answer Correct Answer: B) To make sure that customers do not lose money if a bank fails. 16. You need a new computer, and you will need a loan in order to buy one. which lender is most likely to charge you the highest interest rate on your loan? A) Savings and loan association. B) Savings bank. C) Credit union. D) Finance company. Show Answer Correct Answer: D) Finance company. 17. Why is portability an important characteristic of money? A) If we could not carry money with us, it would be hard to use. B) It would be hard to use money if everyone did not accept it. C) If money did not last a long time, we could not use it to store value. D) It would be confusing if some dollar bills were worth more than others. Show Answer Correct Answer: A) If we could not carry money with us, it would be hard to use. 18. Which of the following people is most likely to succeed as a sole proprietor? A) Film studio. B) Dry cleaner. C) Kitchen appliance maker. D) Football helmet manufacturer. Show Answer Correct Answer: B) Dry cleaner. 19. ..... are called legal tenders A) Demand deposit. B) Time deposits. C) Inter-bank deposit. D) Currency notes and coins. Show Answer Correct Answer: D) Currency notes and coins. 20. Master and Visa are what? A) Interest. B) Collateral. C) Credit cards. D) Withdrawal. Show Answer Correct Answer: C) Credit cards. 21. The concept of global economy has come into existence due to A) Store of value. B) Transfer of value. C) Measure of value. D) None of these. Show Answer Correct Answer: B) Transfer of value. 22. Which of the following could be considered a synonym for FICA? A) Intergovernmental revenue. B) Corporate income tax. C) Excise tax. D) Payroll tax. Show Answer Correct Answer: D) Payroll tax. 23. What type of money is issued by the United States government? A) Fiat money. B) Representative money. C) Near money. D) Commodity money. Show Answer Correct Answer: A) Fiat money. 24. Mortimer transfers $ 100 from his savings account to his checking account. The effect on the money supply will be A) M1 increases, M2 decreases, M3 is unchanged. B) M1, M2, M3 all increase. C) M1 will increase, M2 and M3 are unchanged. D) M1 will increase, M2 will increase, M3 falls. Show Answer Correct Answer: C) M1 will increase, M2 and M3 are unchanged. 25. What loan do you borrow for buying a house? A) Commercial. B) Line of credit. C) Indivdiual. D) Mortgage. Show Answer Correct Answer: D) Mortgage. 26. How useful cacao beans might be as money today. / not durable enough to retain value over time. A) Medium of exchange. B) Standard of value. C) Store of value. D) None of above. Show Answer Correct Answer: C) Store of value. 27. If the Fed set the reserve requirement at 20%, the money multiplier would be A) 4. B) 10. C) 5. D) Indeterminant. Show Answer Correct Answer: C) 5. 28. Commercial banks can create money by A) Transferring depositors' accounts at the Federal Reserve for conversion to cash. B) Maintaining a 100% reserve requirement. C) Buying Treasury bills from the Federal Reserve. D) Lending excess reserves to customers. Show Answer Correct Answer: D) Lending excess reserves to customers. 29. The amount we take out as a loan A) Principal. B) Portfolio. C) Stock. D) Interest. Show Answer Correct Answer: A) Principal. 30. You have invested $ 500 at 9 percent interest. According to the Rule of 72, how soon will the money double in value? (72/r = time) A) 8 years. B) 6 years. C) 4 years. D) 12 years. Show Answer Correct Answer: A) 8 years. ← 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