This quiz works best with JavaScript enabled. Home > Money And Banking > Money And Banking – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 19 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following describes the risk and return profile of savings bonds? A) High risk, high return. B) High risk, low return. C) Low risk, low return. D) Low risk, high return. Show Answer Correct Answer: C) Low risk, low return. 2. People work mainly to ..... money. A) Pay. B) Finance. C) Earn. D) Win. Show Answer Correct Answer: C) Earn. 3. An essential function for a bank is to A) Maximize its assets. B) Create money through lending. C) Lend all of its deposits. D) Minimize its reserve ratio. Show Answer Correct Answer: B) Create money through lending. 4. Bank belonging to the Federal Reserve System. A) Liquidity. B) Central Bank. C) Member Bank. D) Default. Show Answer Correct Answer: C) Member Bank. 5. Financial Institutions include: A) Banks. B) Savings & Loans. C) Credit Unions. D) All of the above. Show Answer Correct Answer: D) All of the above. 6. Which is not the function if central bank A) Banker to the government. B) Controller of the money supply. C) Bankers bank. D) Overdraft facility. Show Answer Correct Answer: D) Overdraft facility. 7. A condition that exists when a borrower cannot repay a loan A) Liquidity. B) Central Bank. C) Member Bank. D) Default. Show Answer Correct Answer: D) Default. 8. The following is information about the central bank and its description:As with households, governments need a bank account and the central bank fulfills this function. A) The sole issuer of notes and coins. B) The government's bank. C) The bankers' bank. D) Lender of last resort. Show Answer Correct Answer: B) The government's bank. 9. After the Civil War, the National Banking Acts gave the federal government the power to do all of the following EXCEPT: A) Insure banks against failure. B) Charter banks. C) Require banks to hold adequate gold and silver reserves. D) Issue a single national currency. Show Answer Correct Answer: A) Insure banks against failure. 10. The central banking system of the United States. A) Federal Deposit Insurance Corporation. B) Federal Reserve System. C) Representative Money. D) Fractional Reserve Banking. Show Answer Correct Answer: B) Federal Reserve System. 11. What is fractional reserve banking? A) Only some deposits must be paid on demand. B) Banks lend onnly some of their money toward mortgages. C) People transfer money and pay bills electgronically. D) Banks keep some money on hand and lend out the rest. Show Answer Correct Answer: D) Banks keep some money on hand and lend out the rest. 12. Purchases made with your debit card are usually: A) Deducted immediately from your checking account. B) Deducted from your credit card balance. C) Added to your credit card balance. D) Put on your credit card bill as a cash advance. Show Answer Correct Answer: A) Deducted immediately from your checking account. 13. If governments print too much money and flood the market with currency it causes ..... This is bad for the overall economy because prices will rise quickly and savings will be lost. A) Tariffs. B) Deregulation. C) Inflation. D) More demand for money. Show Answer Correct Answer: C) Inflation. 14. The outstanding balance on a loan, excluding interest and fees. A) Principal. B) Collateral. C) Loan. D) Balance. Show Answer Correct Answer: A) Principal. 15. All of the money available in the US economy A) Treasury. B) Money Supply. C) Banks. D) Congress. Show Answer Correct Answer: B) Money Supply. 16. To monitor/supervise state banks (keep an eye on how much they loan people) is the main responsibility of the A) FED. B) FDA. C) FCC. D) FDIC. Show Answer Correct Answer: A) FED. 17. The most commonly used currency in the world is the ..... A) Dollar. B) Euro. C) Yen. D) None of above. Show Answer Correct Answer: A) Dollar. 18. A certain % of checkable deposits that banks keep on reserve. A) Reserve Requirement. B) Excess Reserves. C) Savings. D) Fractional Reserve. Show Answer Correct Answer: A) Reserve Requirement. 19. M2 includes A) All of M1. B) Small time deposit. C) Savings Account Deposits. D) All of the Above. Show Answer Correct Answer: D) All of the Above. 20. Checks are not money because they A) Can bounce when there are not enough funds to cash them. B) Are just instruments to transfer money between banks. C) Are not always accepted when trying to purchase goods or services. D) Are not issued by the government. E) Are not guaranteed by banks. Show Answer Correct Answer: B) Are just instruments to transfer money between banks. ← 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