This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 9 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What does "lender of last resort" mean with respect to the Federal Reserve? A) The Fed will lend money to a bank in a financial emergency. B) The Fed has the power to decide how much money a bank can lend out. C) The Fed decides interest rates for interbank loans. D) The Fed makes decisions about who a bank can lend money to. Show Answer Correct Answer: A) The Fed will lend money to a bank in a financial emergency. 2. Government, businesses, and individuals in the United States all accept US currency because: A) Currency is valued higher than coins. B) They have confidence in the government. C) Currency is the only type of money. D) All currency is backed up by gold. Show Answer Correct Answer: B) They have confidence in the government. 3. Which is a common difficulty for a new sole proprietorship? A) Paying all the legal and governmental fees required in the first year. B) Finding enough workers in order to expand quickly. C) Having enough money to stay in business while building a customer base. D) Finding enough investors to purchase company stock. Show Answer Correct Answer: C) Having enough money to stay in business while building a customer base. 4. A narrow measure of the money supply that examines currency, demand deposits & checkable deposits. A) M2. B) D1. C) D2. D) M1. Show Answer Correct Answer: D) M1. 5. In our country a(n) ..... of $ 250 is paid weekly to a family with more than three children. A) Fee. B) Allowance. C) Income. D) Wage. Show Answer Correct Answer: B) Allowance. 6. This is when two banks come together and the FED watches over the banks A) Regulates bank holding companies. B) Adjust/control the money supply. C) Responsibilities of the FED. D) Check clearing process. Show Answer Correct Answer: A) Regulates bank holding companies. 7. Which of the following is not a characteristic of money? A) It will physically last over time. B) It is uniform in apperance. C) It is difficult to forge. D) It can settle debts in different time periods. Show Answer Correct Answer: D) It can settle debts in different time periods. 8. In the short run, a contraction in the money supply will most likely change the nominal interest rate and aggregate demand in which of the following ways? Nominal Interest Rates/Aggregate Demand A) Decrease/decrease. B) Decrease/increase. C) Increase/decrease. D) Increase/not change. E) Increase/increase. Show Answer Correct Answer: C) Increase/decrease. 9. Savers and borrowers are linked through financial institutions when A) Both savers and borrowers invest in the same markets. B) Savers deposit money that is then used to lend money to borrowers. C) The financial institutions offer the same rate of exchange to each. D) Borrowers take money from financial institutions to invest with savers. Show Answer Correct Answer: B) Savers deposit money that is then used to lend money to borrowers. 10. Objects that have value in themselves and are also used as money. A) Representative money. B) Credit cards. C) Simple money. D) Commodity money. Show Answer Correct Answer: D) Commodity money. 11. When was the stock market crash? A) 1910s. B) 1940s. C) 1930s. D) 1920s. Show Answer Correct Answer: D) 1920s. 12. A sudden panic by depositors to withdraw their paper money from banks. A) Bank run. B) Demand deposits. C) Fractional reserve banking. D) Default. Show Answer Correct Answer: A) Bank run. 13. Money must be easily divided into smaller denominations (ex. making change). A) Uniformity. B) Acceptability. C) Divisibility. D) Durability. Show Answer Correct Answer: C) Divisibility. 14. Which of these is NOT a reason to save money? A) Major purchases. B) Retirement. C) Unexpected emergency. D) So you can loan it to your friends. Show Answer Correct Answer: D) So you can loan it to your friends. 15. ..... is the rate at which commercial banks borrow from central bank in emergency A) CRR. B) SLR. C) Bank rate. D) Reverse repo rate. Show Answer Correct Answer: C) Bank rate. 16. Which of the following is the function of a Central bank? A) Issue of notes. B) Banker to the Government and Banks. C) Supply and control of money. D) All of these. Show Answer Correct Answer: D) All of these. 17. Demand deposits are A) Certificates of deposit. B) Checking accounts. C) Money market accounts. D) Savings accounts. Show Answer Correct Answer: B) Checking accounts. 18. The buying an selling of government securities in financial markets is an example of A) Discount rate. B) Open market operations. C) Prime rate. D) Tight money policy. Show Answer Correct Answer: B) Open market operations. 19. Which one of the following items would be the most liquid (able to be used in an exchange immediately)? A) Pizza. B) Ticket to next week's basketball game. C) Stereo. D) Dollar bill. Show Answer Correct Answer: D) Dollar bill. 20. Savings and loan associations were established to ..... A) Start businesses. B) Pay for college. C) Buy homes. D) None of above. Show Answer Correct Answer: C) Buy homes. 21. Which of these is a function of the Federal Reserve? A) Acting as the state government's fiscal agent. B) Loaning money. C) Setting reserve requirements. D) Supervising international banks. Show Answer Correct Answer: C) Setting reserve requirements. 22. Required reserve ratio determines the A) Excess reserves. B) Lending capacity. C) Required reserves. D) Money multiplier. Show Answer Correct Answer: D) Money multiplier. 23. We need guaranteed financial ..... before we can even start the design work. A) Plans. B) Agreement. C) Backing. D) Analysis. Show Answer Correct Answer: C) Backing. 24. What are 2 characteristics dollars must have to be acceptable in our society? A) Green and gold. B) Portable and durable. C) Old and new. D) Residue from filthy places. Show Answer Correct Answer: B) Portable and durable. 25. In order to encourage investment in the economy, the Central Bank may ..... A) Reduce Cash Reserve Ratio. B) Increase Bank Rate. C) Increase Cash Reserve Ratio. D) Sell Government securities in the open market. Show Answer Correct Answer: A) Reduce Cash Reserve Ratio. 26. When Mary paid the bill, she was given a ..... for her money. A) Cheque. B) Ticket. C) Stamp. D) Receipt. Show Answer Correct Answer: D) Receipt. 27. Bill and Wilma preferred to use ..... A) Cash. B) Credit cards. C) Checks. D) None of above. Show Answer Correct Answer: C) Checks. 28. What does the phrase a medium of exchange mean when describing a function of money? A) Price of an item can be measured in terms of money units. B) Money is generally accepted means of payment. C) You can save money because it keeps its value. D) Borrowers know how much they need to pay back on a loan. Show Answer Correct Answer: B) Money is generally accepted means of payment. 29. The cowrie shells was used as money so widely because it is hard-wearing and long lasting. Which characteristics of money does this describe? A) Divisibility. B) Acceptability. C) Scarcity. D) Durability. Show Answer Correct Answer: D) Durability. 30. Christine ..... her money from the ATM and went on a big shopping spree. A) Ejected. B) Pulled. C) Withdrew. D) Extracted. Show Answer Correct Answer: C) Withdrew. ← 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 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books