This quiz works best with JavaScript enabled. Home > Money And Banking > Money And Banking – Quiz 17 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 17 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The Fed provides ..... to banks. A) Currency. B) Liquidity. C) Tax benefits. D) None of above. Show Answer Correct Answer: A) Currency. 2. Suppose the required reserve ratio is 20% and there is no currency drain. Then a $ 100 increase in the monetary base results in the banking system increasing the quantity of money by A) $ 80. B) $ 400. C) $ 1, 000. D) $ 500. E) $ 100. Show Answer Correct Answer: D) $ 500. 3. The Federal Reserve is responsible for implementing A) Monetary policy. B) Fiscal policy. C) Federal policy. D) Demand policy. Show Answer Correct Answer: A) Monetary policy. 4. When an individual is unable to repay a loan A) Default. B) Speculation. C) Liquidity. D) Interest. Show Answer Correct Answer: A) Default. 5. The Federal Reserve often sells government ..... A) Bonds. B) Notes. C) Both. D) None of above. Show Answer Correct Answer: C) Both. 6. The difference between representative money and fiat money is that A) Representative money is worth more than fiat money. B) Fiat money is counted in coins; representative money is counted in paper dollars. C) Fiat money is more durable than representative money. D) Representative money is backed by silver or gold, ; fiat money is not. Show Answer Correct Answer: D) Representative money is backed by silver or gold, ; fiat money is not. 7. In the Money Market graph, the A) Demand for money is perfectly elastic. B) Supply of money is perfectly inelastic. C) The price axis is labeled real interest rate. D) The supply curve is leaning. Show Answer Correct Answer: B) Supply of money is perfectly inelastic. 8. Money can withstand physical wear and tear A) Uniformity. B) Durability. C) Divisibility. D) Portability. Show Answer Correct Answer: B) Durability. 9. The Federal Reserve is the bank's ..... A) Lending institution. B) Hospital. C) Government. D) Bank. Show Answer Correct Answer: D) Bank. 10. American leaders in the early United States wanted to establish a stable banking system in order to A) Provide competition for merchant lenders. B) Promote international trade and economic growth. C) Help all Americans build wealth through savings accounts. D) Allow individual merchants to charge fees for loans and other services. Show Answer Correct Answer: B) Promote international trade and economic growth. 11. Which of these results from the implementation of a tight money policy? A) Increase in wage-price controls. B) Increase in the price of credit. C) Decrease in the price of credit. D) Decrease in interest rates. Show Answer Correct Answer: B) Increase in the price of credit. 12. What condition is neccessary for fiat money to work? A) Money owed by customers must be paid on time. B) The government must control the money supply. C) Banks must hold enough gold to cover paper money they give out. D) Customers with checking accounts cannot earn interest. Show Answer Correct Answer: B) The government must control the money supply. 13. As an investor if you wanted to diversify your retirement portfolio which financial product should you select . A) Stock. B) Mutual Fund. C) Bond. D) Bitcoin. Show Answer Correct Answer: B) Mutual Fund. 14. The ..... guarantees your bank deposits up to $ 250, 000? A) Chinese Government. B) FDIC (Federal Deposit Insurance Corporation). C) The President. D) The Bank. Show Answer Correct Answer: B) FDIC (Federal Deposit Insurance Corporation). 15. People can take their money with them easily. A) Portability. B) Uniformity. C) Durability. D) Divisibility. Show Answer Correct Answer: A) Portability. 16. Higher-than-normal interest rates caused by heavy government borrowing hurts private borrowers through ..... A) "pay-as-you-go" provision. B) Crowding out effect. C) Spending caps. D) Deficit spending. Show Answer Correct Answer: B) Crowding out effect. 17. Means of comparing goods and services A) Medium of Exchange. B) Unit of Account. C) Store of Value. D) Uniformity. Show Answer Correct Answer: B) Unit of Account. 18. What is the ratio of deposits which commercial banks are required to keep with themselves called? A) CRR. B) SLR. C) Both. D) None of above. Show Answer Correct Answer: B) SLR. 19. A commercial bank chartered by the federal government. A) Money Supply. B) Gold Standard. C) National Bank. D) Bank. Show Answer Correct Answer: C) National Bank. 20. Money is the most liquid of all the asset because A) It is a medium of exchange. B) It is an unit of account. C) It act as a store of value. D) It is a standard of deferred payment. Show Answer Correct Answer: A) It is a medium of exchange. ← 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