This quiz works best with JavaScript enabled. Home > Money And Banking > Money And Banking – Quiz 13 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 13 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is not a function of the central bank? A) Lender of last resort. B) Managing monetary policy. C) Controlling money supply. D) Accepting deposits. Show Answer Correct Answer: D) Accepting deposits. 2. 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) Collateral. C) Mortgage. D) Foreclosure. Show Answer Correct Answer: D) Foreclosure. 3. Which option is a characteristics of money? A) Medium of exchange. B) Unit of account. C) Portability. D) Store of value. Show Answer Correct Answer: C) Portability. 4. 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 makes decisions about who a bank can lend money to. C) The Fed has the power to decide how much money a bank can lend out. D) The Fed decides interest rates for interbank loans. Show Answer Correct Answer: A) The Fed will lend money to a bank in a financial emergency. 5. 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. 6. 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. 7. A narrow measure of the money supply that examines currency, demand deposits & checkable deposits. A) M1. B) M2. C) D1. D) D2. Show Answer Correct Answer: A) M1. 8. Securities firm A) Financial institution that offers savings and loan services. B) A financial institution thats involved in trading securities in financial markets. C) A financial institution that accepts money from customers and deposits it into the customer's account. D) Financial institution that makes money by issuing loans. Show Answer Correct Answer: B) A financial institution thats involved in trading securities in financial markets. 9. 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. 10. This is when two banks come together and the FED watches over the banks A) Responsibilities of the FED. B) Adjust/control the money supply. C) Regulates bank holding companies. D) Check clearing process. Show Answer Correct Answer: C) Regulates bank holding companies. 11. 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. 12. 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) Increase/decrease. B) Increase/increase. C) Increase/not change. D) Decrease/decrease. E) Decrease/increase. Show Answer Correct Answer: A) Increase/decrease. 13. 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. 14. Objects that have value in themselves and are also used as money. A) Representative money. B) Commodity money. C) Simple money. D) Credit cards. Show Answer Correct Answer: B) Commodity money. 15. When was the stock market crash? A) 1930s. B) 1940s. C) 1920s. D) 1910s. Show Answer Correct Answer: C) 1920s. 16. 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. 17. Money must be easily divided into smaller denominations (ex. making change). A) Durability. B) Divisibility. C) Acceptability. D) Uniformity. Show Answer Correct Answer: B) Divisibility. 18. Which of these is NOT a reason to save money? A) Retirement. B) Unexpected emergency. C) Major purchases. D) So you can loan it to your friends. Show Answer Correct Answer: D) So you can loan it to your friends. 19. ..... 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. 20. 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. ← PreviousNext →Related 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 9Money And Banking Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books