This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Travelers checks, often used for vacations: A) Travelers checks, often used for vacations:. B) Are free at most banks. C) Function as cash and are easily replaced if lost. D) Are FDIC insured. Show Answer Correct Answer: C) Function as cash and are easily replaced if lost. 2. What is the currency of the US called? A) Coins. B) Representative money. C) Fiat money. D) Gold. Show Answer Correct Answer: C) Fiat money. 3. What function does a central bank fulfil? A) It prints and issues currency. B) It offers overdraft facilities to individuals. C) It operates deposit accounts. D) It raises taxation. Show Answer Correct Answer: A) It prints and issues currency. 4. What is the purpose of the Federal Deposit Insurance Corporation (FDIC)? A) To make sure that banks charge a fair amount of interest on loans. B) To make sure that customers do not lose money if a bank fails. C) To make sure that the government has enough gold to cover its expenses. D) To make sure that banks do not fail. Show Answer Correct Answer: B) To make sure that customers do not lose money if a bank fails. 5. M1 and M2 makeup all of this in the U.S. economy. A) Money supply. B) Currency. C) Representative money. D) Fiat money. Show Answer Correct Answer: A) Money supply. 6. Which of the following option is the function of the central bank as a banker to commercial banks? A) Control foreign exchange. B) Managing the national debt. C) Policy maker for monetary policy. D) Lender of the last resort. Show Answer Correct Answer: D) Lender of the last resort. 7. Barter system is now replaced by A) Monetary system. B) Banking system. C) Financial system. D) International system. Show Answer Correct Answer: A) Monetary system. 8. The interest rate the bond issure pays to the bondholder is called the A) Discount rate. B) Maturity rate. C) Coupon rate. D) Value rate. Show Answer Correct Answer: C) Coupon rate. 9. Electronic transfer of money in terms of credit/debit entries of the account holders in the banks is called A) E-money. B) E-marketing. C) E-banking. D) E-business. Show Answer Correct Answer: A) E-money. 10. Our company made a record ..... last year. A) Winning. B) Profit. C) Benefit. D) Earn. Show Answer Correct Answer: B) Profit. 11. Medium of Exchange A) Used to exchange for goods and services needed. B) Means, money is a common measure of the worth or price of a good. C) Means it can be saved or stored for later, without the value decreasing. D) Money placed into an account. Show Answer Correct Answer: A) Used to exchange for goods and services needed. 12. The simple interest formula is I=Prt. The P represents the principal. What is PRINCIPAL in an economic sense? A) The amount the bank owes you for being a customer at their bank. B) The percent interest for his year. C) The head administrator of a school. D) The amount of money borrowed or deposited. Show Answer Correct Answer: D) The amount of money borrowed or deposited. 13. The amount one must pay to borrow money from someone else A) Principal. B) Diversification. C) Interest. D) Portfolio. Show Answer Correct Answer: C) Interest. 14. Why is representative money more useful than commodity money? A) Representative money can be used for other things besides currency. B) Representative money has value because the government says it does. C) Representative money exists in unlimited supply, so more people use it. D) Representative money is portable, durable, divisible, and acceptable. Show Answer Correct Answer: D) Representative money is portable, durable, divisible, and acceptable. 15. Your portfolio is diversified. You have ..... investments. A) Preferred and common. B) Financially based. C) Many different. D) Completely successful. Show Answer Correct Answer: C) Many different. 16. During times of hyperinflation A) The money supply is decreasing. B) The purchasing power of the currency increases rapidly. C) People hoard the official currency. D) People often adopt something other than the official currency to use as money. Show Answer Correct Answer: D) People often adopt something other than the official currency to use as money. 17. How useful cacao beans might be as money today./ unclear what the beans are worth or how to measure them against other items A) Medium of exchange. B) Standard of value. C) Store of value. D) None of above. Show Answer Correct Answer: B) Standard of value. 18. Anything that is used to determine value during the exchange of goods and services. A) Unit of Account. B) Medium of Exchange. C) Barter System. D) Store of Value. Show Answer Correct Answer: B) Medium of Exchange. 19. Money which is accepted as a medium of exchange because of trust between the payer and the payee is called- A) Full bodied money. B) Fait money. C) Fiduciary money. D) None of these. Show Answer Correct Answer: C) Fiduciary money. 20. Law passed in 1991 that lifted the last of banking restrictions allowing banks, insurance companies, and investment companies to all offer similar products. A) Banking Regulation Act. B) Banking Deregulation Act. C) Financial Services Act. D) Federal Reserve Act. Show Answer Correct Answer: C) Financial Services Act. 21. If they are not more careful with their accounts, they will go ..... A) Broken. B) Poor. C) Penniless. D) Bankrupt. Show Answer Correct Answer: D) Bankrupt. 22. Money must withstand physical wear and tear from being used over and again. A) Divisibility. B) Uniformity. C) Portability. D) Durability. Show Answer Correct Answer: D) Durability. 23. Which is the primary source of revenue for the federal government? A) Fees. B) Duties. C) Borrowing. D) Taxes. Show Answer Correct Answer: D) Taxes. 24. To reduce the money supply, the Fed will most likely A) Buy bonds from the banks. B) Sell bonds to the banks. C) Invade the bank through the use of armed forces. D) Call the United Nations for a loan. Show Answer Correct Answer: B) Sell bonds to the banks. 25. The amount of a deposit that the bank currently keeps and puts into their vault A) Total Reserve. B) Excess Reserve. C) Reserve Requirement. D) Interest Rate. Show Answer Correct Answer: A) Total Reserve. 26. When you use money to purchase your lunch, money is serving which role(s)? I. Medium of exchange II. Store of value III. Unit of account A) I only. B) II only. C) III only. D) I and III only. Show Answer Correct Answer: D) I and III only. 27. What is the difference between a credit and debit card? A) A credit card can be used to borrow money or make purchases, a debit card uses your own money. B) You can borrow money with both. C) Credit card is connected to your personal bank account and a debit card is used for borrowing money. D) With a debit card you have to pay the money back. Show Answer Correct Answer: A) A credit card can be used to borrow money or make purchases, a debit card uses your own money. 28. Amount held bank: A) Open Market Operations. B) Discount Rate Changes. C) Interest Rate Paid on Reserves. D) Required Reserve Rate Changes. Show Answer Correct Answer: D) Required Reserve Rate Changes. 29. If you lose a check and want to prevent someone else from using it, you can issue this type of order to the bank: A) Stop payment. B) Demand deposit. C) Outstanding check. D) Cancelled check. Show Answer Correct Answer: A) Stop payment. 30. Money or things which can be quickly and easily converted into money with little or no loss of purchasing power. A) Central Bank. B) Liquidity. C) Default. D) Member Bank. Show Answer Correct Answer: B) Liquidity. ← PreviousNext →Related QuizzesFinance QuizzesMoney And Banking Quiz 1Money And Banking Quiz 2Money And Banking Quiz 3Money And Banking Quiz 4Money And Banking Quiz 6Money And Banking Quiz 7Money And Banking Quiz 8Money And Banking Quiz 9Money And Banking Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books