This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A good that is used as a medium of exchange but also has intrinsic worth because it has other uses. Gold or silver coins are commodity money. A) Currency. B) Fiat Money. C) Commodity Money. D) Representative Money. Show Answer Correct Answer: C) Commodity Money. 2. Young Metro begins trusting banks and he deposits $ 10, 000 in his. The reserve requirement is 20%. How much can his bank now lend out? A) $ 0. B) $ 8, 000. C) $ 10, 000. D) $ 2, 000. Show Answer Correct Answer: B) $ 8, 000. 3. What possess general acceptability? A) Bank draft. B) Money. C) Bill of exchange. D) None of above. Show Answer Correct Answer: B) Money. 4. Money created by a government decree that has no alternative value or use as a commodity A) Commodity Money. B) Fiat Money. C) Specie. D) Bond. Show Answer Correct Answer: B) Fiat Money. 5. Depositing a set amount into a bank for a set amount of time (without touching it) A) Certificate of Deposit. B) Futures. C) Options. D) Return. Show Answer Correct Answer: A) Certificate of Deposit. 6. Redirecting resources from being consumed today to create future benefits A) FDIC. B) Bond. C) Mortgage. D) Investment. Show Answer Correct Answer: D) Investment. 7. The most basic service a bank provides is A) A safe way to store and save money. B) To pay interest. C) To provide credit cards. D) To provide mortgages. Show Answer Correct Answer: A) A safe way to store and save money. 8. When James received his paycheck, he planned to cash it at a check cashing store. You advise him to cash it at his own bank if possible. Why? A) They typically require a two day waiting period before giving cash. B) They typically charge high fees. C) There is likely to be a ceiling on the size of the check he can cash. D) They generally require a co-signor. Show Answer Correct Answer: B) They typically charge high fees. 9. Bank that can lend to other banks in times of need, a "bankers' bank" . A) Default. B) Central Bank. C) Liquidity. D) Member Bank. Show Answer Correct Answer: B) Central Bank. 10. Which of the following does the Federal Reserve use to regulate the nation's money supply? A) Proposing legislation. B) Regulations. C) Monetary policy. D) Fiscal policy. Show Answer Correct Answer: C) Monetary policy. 11. You have $ 1000 dollars that you want to save. you know that you will not need that money for a year.you want to earn the most interst possible and you want the rate to be guaranteed. Where should you put your money? A) Money market account. B) Certificates of deposit (CD). C) Checking account. D) Savings account. Show Answer Correct Answer: B) Certificates of deposit (CD). 12. An institution that receives, lends, borrow, exchange, issues and safeguards money. A) Money Supply. B) Gold Standard. C) National Bank. D) Bank. Show Answer Correct Answer: D) Bank. 13. If you car is said to be worth $ 20, 000, what function of money is being used? A) Medium of Exchange. B) Acceptable. C) Store of Value. D) Unit of Account. Show Answer Correct Answer: D) Unit of Account. 14. When you are an old age pensioner, you have to learn to ..... a very small income. A) Live on. B) Live down. C) Live out. D) Live up to. Show Answer Correct Answer: A) Live on. 15. What is a bank's primary source of income? A) Housing market. B) Interest. C) China. D) The Fed. Show Answer Correct Answer: B) Interest. 16. Who appoints members of the Board of Governs. A) Secretary of the Treasury. B) Vice President. C) Congress. D) President. Show Answer Correct Answer: D) President. 17. Currency, demand deposits and other checkable deposits are considered ..... A) M2. B) M0. C) M1. D) None of above. Show Answer Correct Answer: C) M1. 18. Which type of tax is levied on the sale of an asset held for 12 months or longer? A) Marginal tax. B) Capital gains tax. C) Flat tax. D) Sales tax. Show Answer Correct Answer: B) Capital gains tax. 19. The amount of money that is borrowed. A) Mortgage. B) Credit Card. C) Interest. D) Principal. Show Answer Correct Answer: D) Principal. 20. The central bank can increase the availability of credit by: A) Selling government securities. B) Raising repo rate. C) Raising reverse repo rate. D) Buying government securities. Show Answer Correct Answer: A) Selling government securities. 21. Marcella puts money into her savings account. Which function of money does this illustrate? A) Unit of account. B) Store of value. C) Medium of exchange. D) Fiat money. Show Answer Correct Answer: B) Store of value. 22. Compared to salt, jewels are a better form of money. This is because(1) jewels are more homogeneous.(2) the supply of jewels are more limited.(3) jewels are more durable. A) (1) and (2) only. B) (1) and (3) only. C) (2) and (3) only. D) (1), (2) and (3). Show Answer Correct Answer: C) (2) and (3) only. 23. To an economist, investment means: A) Purchasing bonds. B) Purchasing stocks. C) Purchasing capital. D) Putting your money in a savings account. Show Answer Correct Answer: C) Purchasing capital. 24. A written contract between a borrower and a lender that sets the terms and conditions. A) Collateral. B) Disclosure. C) Loan. D) Forclosure. Show Answer Correct Answer: C) Loan. 25. Includes less liquid assets: A) Currency. B) M2. C) M1. D) Debit Card. Show Answer Correct Answer: B) M2. 26. Which of the following is not instrument if monetary policy A) Open market operation. B) Government spending. C) Bank rate. D) Selective credit control. Show Answer Correct Answer: B) Government spending. 27. "The Fed" is short for: A) Congress. B) The Federal Bureau of Investigations (FBI). C) The Federal Reserve System. D) The Federal Deposit Insurance Corporation. Show Answer Correct Answer: C) The Federal Reserve System. 28. What is the price paid for the use of borrowed money. A) Tax. B) Mortgage. C) Interest. D) Principal. Show Answer Correct Answer: C) Interest. 29. Money taken out of your checking account. A) Withdrawal. B) Stop payment. C) Endorsement. D) Outstanding. Show Answer Correct Answer: A) Withdrawal. 30. ..... is a bank that, among other things, can lend money to other banks. A) National Bank. B) Department of the Interior. C) Central Bank. D) Congress. Show Answer Correct Answer: C) Central Bank. ← 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 7Money And Banking Quiz 8Money And Banking Quiz 9Money And Banking Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books