This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 19 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An important job of the Federal Reserve is to A) Protect the nation. B) Manage and control the money supply. C) Make sure all goods are safe. D) All of the above. Show Answer Correct Answer: B) Manage and control the money supply. 2. To finance a new police station, a local government is most likely to issue a A) Money market bond. B) Municipal bond. C) Treasury bond. D) Junk bond. Show Answer Correct Answer: B) Municipal bond. 3. You ..... your account when you write checks for more money than you ahve in the bank. A) Overdraw. B) Debit card. C) Deposit. D) Service fee. Show Answer Correct Answer: A) Overdraw. 4. When describing a function of money, what does 'a store of value' mean? A) Money is used to exchange for goods and services. B) Money circulates around the economy over time. C) Money may be kept for future spending. D) Money does not lose its value over time. Show Answer Correct Answer: C) Money may be kept for future spending. 5. Demand deposit created by the commercial bank are called A) Time deposit. B) Money. C) Bank money. D) High powered money. Show Answer Correct Answer: C) Bank money. 6. Why was the Federal Reserve System created? A) To serve as the nation's first true central bank. B) All nations are required to join. C) All state-charted banks were eligible to join. D) Bank's bank is the Federal Reserve. Show Answer Correct Answer: A) To serve as the nation's first true central bank. 7. The act of evaluating and setting the value of property A) Amortization. B) Principal. C) Appraisal. D) Overdraft. Show Answer Correct Answer: C) Appraisal. 8. To become a member of the Fed A) Banks have to have at least 1 million customers. B) Banks buy shares of stock. C) Banks have to have a minimum of 1000 branches around the country. D) Banks ask the government permission. Show Answer Correct Answer: B) Banks buy shares of stock. 9. This is when the FED restricts the growth of the money supply, which drives up the interest rates and makes credit hard to get. A) Tight money policy. B) FED Action. C) Monetary Policy. D) Easy money policy. Show Answer Correct Answer: A) Tight money policy. 10. Which aggregate is the most liquid? A) M1. B) M2. C) M4. D) M3. Show Answer Correct Answer: A) M1. 11. Each of the following RBA actions will contract the money supply except ..... A) Raise the reserve ratio. B) Buy bonds. C) Raise the Federal Funds rate. D) Raise the discount rate. Show Answer Correct Answer: B) Buy bonds. 12. A detailed report of an individual's credit history, used by a lender to determine a loan applicant's creditworthiness. A) Debit card. B) Credit card. C) Credit report. D) Credit score. Show Answer Correct Answer: C) Credit report. 13. Our bank for banks A) Fiscal Policy. B) Monetary Policy. C) Fractional Reserve Banking. D) Federal Reserve Bank. Show Answer Correct Answer: D) Federal Reserve Bank. 14. What is true about a debit card? A) It's like a check but comes out of your account automatically. B) It's more convenient than writing a check. C) You use a PIN number to authorize purchases. D) All of the above. Show Answer Correct Answer: D) All of the above. 15. What is NOT a government bond? A) Savings. B) Junk. C) Municipal. D) Treasury bill. Show Answer Correct Answer: B) Junk. 16. The interest rate charged to member banks for borrowing reserves from the Fed. A) Required Reserve Rate Changes. B) Open Market Operations. C) Discount Rate Changes. D) Interest Rate Paid on Reserves. Show Answer Correct Answer: C) Discount Rate Changes. 17. The principal plus accrued interest-to-date (not just principal) is calculated for each time period as more interest accrues A) Simple Interest. B) Loan Interest. C) Compound Interest. D) Credit Card. Show Answer Correct Answer: C) Compound Interest. 18. The Congress of the United States printed Greenbacks to help fund the A) World War I. B) Spanish-American War. C) Korean War. D) Civil War. Show Answer Correct Answer: D) Civil War. 19. Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she avoid? A) Certified check. B) Cashiers check. C) A check. D) Cash. Show Answer Correct Answer: C) A check. 20. Banks keep a portion of deposits in-house and loan the rest A) Fractional Reserve Banking. B) Speculation. C) Federal Reserve Bank. D) Certificate of Deposit. Show Answer Correct Answer: A) Fractional Reserve Banking. 21. All of the following belong in M1 except? A) Checking Accounts. B) Coins. C) Saving Accounts. D) Bills. Show Answer Correct Answer: C) Saving Accounts. 22. The rate at which central bank lends to commercial banks is called? A) SLR. B) CRR. C) Bank rate. D) None of above. Show Answer Correct Answer: C) Bank rate. 23. What is the best example of an action(s) that the Federal Reserve (Fed) can take to stabilize our economy? A) Print money. B) Raise interest rates. C) Require other banks to keep a minimum balance. D) All of the above. Show Answer Correct Answer: D) All of the above. 24. The United States today uses which kind of currency? A) Scarce money. B) Fiat money. C) Representative money. D) Commodity money. Show Answer Correct Answer: B) Fiat money. 25. The exchange of goods without the exchange of money A) Barter System. B) Checking. C) Trade. D) Credit cards. Show Answer Correct Answer: A) Barter System. 26. If they aren't more careful with their money they'll get into ..... A) Overdraft. B) Problem. C) Debt. D) Loss. Show Answer Correct Answer: C) Debt. 27. During mild recessions, if policymakers want to reduce unemployment by increasing investment, which of the following policies would be most appropriate? A) Purchase of government securities by the Federal Reserve. B) An increase in government expenditures only. C) An increase in transfer payments. D) Equal increases in government expenditures and taxes. Show Answer Correct Answer: A) Purchase of government securities by the Federal Reserve. 28. Which of the following agency is responsible for issuing ₹ 1 currency note in India? A) RBI. B) Niti Ayog. C) Ministry of commerce. D) Ministry of finance. Show Answer Correct Answer: D) Ministry of finance. 29. Assets that are offered by the borrower to secure a loan. A) Payment. B) Collateral. C) Endorsement. D) Appraisal. Show Answer Correct Answer: B) Collateral. 30. Supply of money is a A) Flow variable. B) Stock variable. C) Real flow. D) None of these. Show Answer Correct Answer: B) Stock variable. ← 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