This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Commercial banks are also called A) Credit unions. B) Full-service banks. C) Half-service banks. D) Mortgage companies. Show Answer Correct Answer: B) Full-service banks. 2. If the Federal Reserve raised the reserve requirement ratio from 8 percent to 10 percent, other things the same this will A) Increase the amount the bank can loan. B) Decrease the amount the bank can loan. C) Not change the amount the bank can loan. D) Decrease the money multiplier and increased the potential growth in the money supply. Show Answer Correct Answer: B) Decrease the amount the bank can loan. 3. A severe economic downturn results in ..... . A) Rising prices. B) Increased aggregate demand. C) Falling prices. D) Decreased government regulation. Show Answer Correct Answer: C) Falling prices. 4. In bartering economies, people trade what they ..... for what they ..... A) Buy; sell. B) Have; need. C) Own; buy. D) Want; need. Show Answer Correct Answer: B) Have; need. 5. Which statement best explains why money was invented? A) Money was invented to facilitate the exchange of goods and services. B) Money was invented to support a barter economy. C) Money was invented to strengthen government power and control. D) Money was invented to lift people out of poverty. Show Answer Correct Answer: A) Money was invented to facilitate the exchange of goods and services. 6. ..... are a paper currency issued by the FED. this is the real name for our bills. A) Federal Reserve Notes. B) Shilling. C) Specie. D) Disney bucks. Show Answer Correct Answer: A) Federal Reserve Notes. 7. Commercial bank create credit money by way of ..... A) Time deposit. B) Treasury Bill. C) Bill of Exchange. D) Demand deposit. Show Answer Correct Answer: D) Demand deposit. 8. What is the place responsible for creating and printing U.S. paper money? A) U.S. Mint. B) Federal Reserve Bank. C) Bureau of Engraving and Printing. D) FDIC. Show Answer Correct Answer: C) Bureau of Engraving and Printing. 9. Which of the following statements describes a function of money? I. Money is a medium of exchange.II. Money is a store of value.III. Money is a unit of account. IV. Money is a factor of production. A) I and IV only. B) I, II and IV only. C) II, III and IV only. D) I, III, and IV only. Show Answer Correct Answer: D) I, III, and IV only. 10. The amount of new money the banking system generates with each dollar of deposits A) Legal Reserves. B) Member Bank Reserves. C) Money Multipliers. D) Excess Reserves. Show Answer Correct Answer: C) Money Multipliers. 11. Which statement about a country's banks is correct? A) Commercial banks hold the financial accounts of the government. B) Commercial banks offer loans to consumers and firms. C) The central bank sets the government's tax and spending policies. D) The central bank supplies foreign currency to members of the public. Show Answer Correct Answer: B) Commercial banks offer loans to consumers and firms. 12. Who circulates all mint and one rupee notes in India? A) Ministry of External Affairs. B) RBI. C) Ministry of Finance. D) State Government. Show Answer Correct Answer: C) Ministry of Finance. 13. The percentage of each deposit that the bank must hold in their vault, or on record with the Fed, is determined by the A) Money multiplier. B) Required reserve ratio. C) Discount rate. D) Federal funds rate. Show Answer Correct Answer: B) Required reserve ratio. 14. Central banks ..... A) Lend and borrow money. B) Accept deposits from clients. C) Make overdrafts. D) Manipulate interest rate. Show Answer Correct Answer: D) Manipulate interest rate. 15. Specific type of loan used to buy real estate A) Credit Card. B) Principal. C) Mortgage. D) Interest. Show Answer Correct Answer: C) Mortgage. 16. The following is information about the central bank and its description:To maintain the scarcity of money, the central bank is normally the only institution that can generate physical money A) The sole issue of notes and coins. B) The government's bank. C) The bankers' bank. D) Lender of the last resort. Show Answer Correct Answer: A) The sole issue of notes and coins. 17. Average time a paper bill is in circulation A) 10 years. B) 20 years. C) 5 years. D) <2 years. Show Answer Correct Answer: D) <2 years. 18. If a loan is repaid at a commercial bank then A) Money is destroyed. B) Commercial bank assets are decreased. C) Commercial bank assets are increased. D) Money is created. Show Answer Correct Answer: A) Money is destroyed. 19. The ease with which an asset can be converted into payment for goods & services. A) Banking. B) Medium of Exchange. C) Legal Tender. D) Liquidity. Show Answer Correct Answer: D) Liquidity. 20. What are the four physical characteristics of money? A) Durable, scarce, acceptable and portable. B) Portability, durability, divisibility and uniformity. C) Green, small, uniform and durable. D) None of above. Show Answer Correct Answer: B) Portability, durability, divisibility and uniformity. 21. Investing in several types of investments to reduce the risk of financial loss A) Speculation. B) Return. C) Futures. D) Diversification. Show Answer Correct Answer: D) Diversification. 22. What is the stock market considered, when it is in the positive? A) Bull. B) Bear. C) Neutral. D) All choices. Show Answer Correct Answer: A) Bull. 23. If the money supply increases, what happens in the money market? A) The nominal interest rate rises. B) The nominal interest rate falls. C) Transaction demand for money falls. D) The nominal interest rate does not change. E) Indeterminate. Show Answer Correct Answer: B) The nominal interest rate falls. 24. It is an important day to day job of the Fed to collect ..... A) Taxes. B) And to clear checks. C) Tariffs. D) None of above. Show Answer Correct Answer: B) And to clear checks. 25. The total value of financial assets in the economy that are considered money. These are several different measures of the money supply, called monetary aggregates. A) Money Supply. B) Gold Standard. C) National Bank. D) Bank. Show Answer Correct Answer: A) Money Supply. 26. In the 1800s, people in mining towns in the west often paid for goods with gold. What was the function of the gold? A) It was used as part of the barter system. B) It was used as representative money. C) It was used a fiat money. D) It was used as a currency. Show Answer Correct Answer: D) It was used as a currency. 27. The ..... of living has risen by 25% in the last six months. A) Price. B) Expense. C) Cost. D) Expenditure. Show Answer Correct Answer: C) Cost. 28. Which of the following is not a function of the central bank? A) Controlling money supply. B) Managing monetary policy. C) Lender of last resort. D) Accepting deposits. Show Answer Correct Answer: D) Accepting deposits. 29. A legal process in which property that is collateral for a loan may be sold to help repay the loan when the loan is in default. A) Appraisal. B) Foreclosure. C) Mortgage. D) Collateral. Show Answer Correct Answer: B) Foreclosure. 30. Which option is a characteristics of money? A) Portability. B) Store of value. C) Medium of exchange. D) Unit of account. Show Answer Correct Answer: A) Portability. ← 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 9Money And Banking Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books