This quiz works best with JavaScript enabled. Home > Money And Banking > Money And Banking – Quiz 37 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 37 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the reserve requirement is 25% and banks hold no excess reserves, an open market sale of $ 400, 000 of government securities by the Federal Reserve will A) Decrease the money supply by up to $ 1.6 million. B) Increase the money supply by up to $ 300, 000. C) Increase the money supply by up to $ 100, 000. D) Decrease the money supply by up to $ 100, 000. Show Answer Correct Answer: A) Decrease the money supply by up to $ 1.6 million. 2. What is the relationship between interest rates and demand for money? A) As interest rates decrease, demand for money increases. B) As interest rates increase, demand for money increases. C) Interest rates are determined by demand for money. D) Interest rates and demand for money are unrelated. Show Answer Correct Answer: A) As interest rates decrease, demand for money increases. 3. The company fell deeper and deeper into the ..... and then went bankrupt. A) Red. B) Green. C) Yellow. D) Black. Show Answer Correct Answer: A) Red. 4. ..... is the rate at which the central bank borrow funds from commercial bank A) CRR. B) SLR. C) Bank rate. D) Reverse repo rate. Show Answer Correct Answer: D) Reverse repo rate. 5. What is the purpose of the Board of Governors? A) To set the value of money. B) To say how much money will be printed in a year. C) To help elect the president. D) To set policies for the FED and its members banks to follow. Show Answer Correct Answer: D) To set policies for the FED and its members banks to follow. 6. The federal funds rate is the interest rate that A) The Fed charges the federal government on its loans. B) Equalizes the yield on government bonds and corporate bonds. C) Banks charge one another for short-term loans. D) Is equal to the inflation rate. Show Answer Correct Answer: C) Banks charge one another for short-term loans. 7. Which of the following perform the fewest functions of money? A) Banknotes. B) Demand deposits. C) Negotiable certificates of deposit. D) Savings deposits. Show Answer Correct Answer: C) Negotiable certificates of deposit. 8. In institution that accepts deposits and makes loans is: A) A bank. B) An insurance company. C) A paycheck cashing company. D) A loan shark. Show Answer Correct Answer: A) A bank. 9. ..... a system in which currency could be exchanged for a certain amount of gold. A) Legal tender. B) Gold Standard. C) FDIC. D) Specie. Show Answer Correct Answer: B) Gold Standard. 10. A good tax should be all of these but? A) Simple. B) Efficient. C) Equal. D) Overbearing. Show Answer Correct Answer: D) Overbearing. 11. To act as money, an item should be homogeneous and recognizable. Which characteristics of money does this describe? A) Uniformity. B) Acceptability. C) Scarcity. D) Durability. Show Answer Correct Answer: A) Uniformity. 12. The following is information about the central bank and its description:By acting in this way, the central bank can have tighter control over the ability of banks to lend and create credit; it also makes transfers between banks more efficient. A) The sole issuer of notes and coins. B) The government's bank. C) The bankers' bank. D) Lender of the last resort. Show Answer Correct Answer: C) The bankers' bank. 13. Which of the following is an advantage of partnership but not of sole proprietorship? A) Few regulations. B) Easy to open and close. C) Specialization of skills. D) Limited life. Show Answer Correct Answer: C) Specialization of skills. 14. An agreement made today to purchase or sell a commodity in the future for today's price A) Futures. B) Stock Split. C) Share. D) Portfolio. Show Answer Correct Answer: A) Futures. 15. I can lend you five pounds to help you ..... until you're had time to go to the bank. A) Up. B) Out. C) On. D) By. Show Answer Correct Answer: B) Out. 16. How do savings bonds differ from other forms of bonds? A) Higher return rate. B) Shorter time period. C) Lower price at time of purchase. D) Provides interest payments. Show Answer Correct Answer: C) Lower price at time of purchase. 17. The Federal Reserve System is often called A) The System. B) Supreme Fed System. C) The FED. D) All of the above. Show Answer Correct Answer: C) The FED. 18. The demand for money increases when national income increases because A) The public becomes more optimistic about the future. B) The budget deficit increases. C) The money supply increases. D) Spending on goods and services increases. Show Answer Correct Answer: D) Spending on goods and services increases. 19. Which of the characteristics of money can be defined as "able to be broken down into smaller parts" ? A) Uniformity. B) Durability. C) Portability. D) Divisibility. Show Answer Correct Answer: D) Divisibility. 20. Which of the characteristics of money can be defined as "Consistent or Identical" ? A) Durability. B) Divisibility. C) Uniformity. D) Portability. Show Answer Correct Answer: C) Uniformity. ← 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