This quiz works best with JavaScript enabled. Home > Money And Banking > Money And Banking – Quiz 21 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 21 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. To start their business, the Kowalskis needed a ..... A) Lease. B) Grant. C) Loan. D) None of above. Show Answer Correct Answer: C) Loan. 2. Which of the following is the most liquid monetary aggregate? A) M1. B) M2. C) M3. D) Dollar bills. Show Answer Correct Answer: A) M1. 3. Money comes into the FED, and in exchange, the FED issues a bond certificate to the buyer of the bond. the Net result is A) Money disappears from circulation. B) The money supply decreases. C) Money is added to circulation. D) The money supply decreases. E) 1 and 2. Show Answer Correct Answer: E) 1 and 2. 4. Minnesota is a part of the ..... Reserve District. A) 5th. B) 11th. C) 9th. D) None of above. Show Answer Correct Answer: C) 9th. 5. If the reserve ratio is 25% and Ray deposits $ 100 in the bank the result will be A) $ 400 in money creation. B) $ 100 in money creation. C) $ 400 in money destruction. D) $ 100 in money destruction. Show Answer Correct Answer: A) $ 400 in money creation. 6. Interest earned on both principal and previous interest earnings A) Special Interest. B) Complex Interest. C) Complicated Interest. D) Compound Interest. Show Answer Correct Answer: D) Compound Interest. 7. How easy it is to convert an asset into cash A) Liquidity. B) Reconcile. C) Fiat money. D) Savings account. Show Answer Correct Answer: A) Liquidity. 8. The largest portion of the money supply is ..... A) Currency. B) Demand deposits. C) Traveler's checks. D) None of above. Show Answer Correct Answer: A) Currency. 9. What would make an item unsuitable to act as money? A) Its is easy to carry. B) It is generally acceptable. C) It is recognizable. D) It is perishable. Show Answer Correct Answer: D) It is perishable. 10. One of the disadvantages of operating a barter system is that trading is A) Taking place without currency. B) Carried out in very large markets. C) Limited by availability and demand of goods traded. D) Conducted without consumer protections. Show Answer Correct Answer: C) Limited by availability and demand of goods traded. 11. All of the following are low-risk investments EXCEPT A) Junk bonds. B) Treasury bonds. C) Municipal bonds. D) Savings bonds. Show Answer Correct Answer: A) Junk bonds. 12. When the Fed buys bonds, which of the following occurs? A) The money supply increases, and interest rates increase. B) The money supply increases, and interest rates decrease. C) The money supply decreases, and interest rates decrease. D) The money supply decreases, and interest rates stay the same. Show Answer Correct Answer: B) The money supply increases, and interest rates decrease. 13. Scarcity is important as an economic characteristic of money because ..... A) We need to have plenty of money in circulation. B) Too much money in circulation makes it worth less. C) The more you have the better off you are. D) None of above. Show Answer Correct Answer: B) Too much money in circulation makes it worth less. 14. Which one is the difficulty of the Barter System? A) Lack of Double Coincidence. B) Difficulty of Division of the Goods. C) Lack of General Acceptable Measure of Value. D) All the above. Show Answer Correct Answer: D) All the above. 15. One of the physical properties of money is A) Acceptability. B) Portability. C) Scarcity. D) Stability of value. Show Answer Correct Answer: B) Portability. 16. If you're got a student card, you can get into the exhibition free of ..... A) Cost. B) Price. C) Expense. D) Charge. Show Answer Correct Answer: D) Charge. 17. High powered money consists of: A) Currency and coins held by the public. B) Currency and demand deposits. C) Currency, cash reserves with banks and demand deposits. D) Currency held by the public and cash reserves with banks. Show Answer Correct Answer: D) Currency held by the public and cash reserves with banks. 18. The amount paid by a borrower to a lender in exchange for the use of the lender's money usually expressed as a percentage. A) Loan. B) Foreclosure. C) Interest rate. D) Credit score. Show Answer Correct Answer: C) Interest rate. 19. A member of the Board of Governor serves for A) 4 years. B) 8 years. C) 10 years. D) 14 years. Show Answer Correct Answer: D) 14 years. 20. What kind of interest includes "interest paid on interest" ? A) Simple interest. B) Compound interest. C) Complex interest. D) Profit. Show Answer Correct Answer: B) Compound interest. ← 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