This quiz works best with JavaScript enabled. Home > Money And Banking > Money And Banking – Quiz 35 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 35 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How does a bank make most of its profits? A) Collects fees from credit card purchases. B) Collects fees on safe deposit boxes. C) Federal funding. D) By paying out less in interest on deposits than it earns in interest on loans. Show Answer Correct Answer: D) By paying out less in interest on deposits than it earns in interest on loans. 2. Deposits earn interest A) Checking. B) Savings. C) Money market. D) Mortgage. Show Answer Correct Answer: B) Savings. 3. Recognized A) Any organization that provides services related to money. B) To be acceptable authentic money must be immediately recognizable. C) A financial institution that makes money by issuing loans. D) When the economy is slow, it may take action to lower interest rates. Show Answer Correct Answer: B) To be acceptable authentic money must be immediately recognizable. 4. Which of following is not included in M1 A) Inter bank deposits. B) Currency and coins with public. C) Other deposits with RBI. D) Demand deposits with banks. Show Answer Correct Answer: A) Inter bank deposits. 5. The central bank is ..... authority A) Illegal. B) Public. C) Private. D) Monetary. Show Answer Correct Answer: D) Monetary. 6. Suppose that Captain Crunch bank has a customer deposit $ 5, 000 and the bank's excess reserves go up by $ 4, 000. The reserve ratio is A) 10%. B) $ 1000. C) 20%. D) 40%. Show Answer Correct Answer: C) 20%. 7. All of the following are examples of predatory lenders EXCEPT: A) Payday lenders. B) Check cashing stores. C) Credit unions. D) Pawn shops. Show Answer Correct Answer: C) Credit unions. 8. Paper money that has no intrinsic value is referred to as A) Curved money. B) Fiat money. C) Commodity money. D) Federal money. Show Answer Correct Answer: B) Fiat money. 9. ..... is what money is doing when it serves as payment for goods or services. A) Barter. B) Currency. C) Medium of exchange. D) None of above. Show Answer Correct Answer: C) Medium of exchange. 10. What is the term for a business that is co-owned by two or more people who agree on how responsibilities, profits, and losses will be divided? A) Partnership. B) General partnership. C) Limited partnership. D) Limited liability partnership. Show Answer Correct Answer: A) Partnership. 11. When money is used to acquire goods and services, it is functioning as a A) Medium of exchange. B) Store of value. C) Standard of account. D) Equation of value. Show Answer Correct Answer: A) Medium of exchange. 12. Maximum credit that commercial bank can legally create depends on their A) Gold Reserve. B) Legal reserve ratio( LRR). C) CRR. D) SLR. Show Answer Correct Answer: B) Legal reserve ratio( LRR). 13. Which is a main goal of the Federal Reserve? A) Create a high level of inflation. B) Create a stable, healthy economy. C) Print currency for American citizens. D) Develop new laws for the United States. Show Answer Correct Answer: B) Create a stable, healthy economy. 14. The terms proportional, progressive, and regressive refer to ..... A) Goals of tax reform. B) Principles of taxation. C) Types of taxes. D) Criteria for effective taxes. Show Answer Correct Answer: C) Types of taxes. 15. This is when the FED allows the money supply is allowed to grow and interest rates fall. This stimulates should stimulate the economy. A) Tight Money Policy. B) Monetary Policy. C) Easy Money Policy. D) Financial Policy. Show Answer Correct Answer: C) Easy Money Policy. 16. The biggest problem associated with representative money is A) Difficulty in transporting it. B) Fluctuations in the value of the backing commodity. C) Lack of agreement about exchange rate. D) Di strust of the issuing government. Show Answer Correct Answer: B) Fluctuations in the value of the backing commodity. 17. In the 1990s, the Russian people lost confidence in the value of the ruble, and many were no longer willing to sell goods and services in exchange for Russian currency. Which characteristic of money did the Russian currency lack? A) Acceptability. B) Uniformity. C) Limited supply. D) Durability. Show Answer Correct Answer: A) Acceptability. 18. Money that has value simply because the government says it does is called ..... A) Credit. B) Currency. C) Fiat money. D) Representative money. Show Answer Correct Answer: C) Fiat money. 19. What is NOT one of the three main functions of money? A) Medium of Exchange. B) Store of Value. C) Unit of Account. D) Durability. Show Answer Correct Answer: D) Durability. 20. Troy has $ 50 a month transferred electronically from his checking account to his savings account. This is an example of: A) An installment payment. B) A savings plan. C) An ATM transaction. D) A debit card transaction. Show Answer Correct Answer: B) A savings plan. ← 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