Question 1

A loan that is approved before the money is actually needed is called a(n)

Accepted Answer

A)   collateral loan.
B)   mortgage.
C)   amortization.
D)   security note.
E)   line of credit.F) B) and E)
G) A) and C)

Question 2

For customers who do their banking solely online, the largest disadvantage is the increased security threat.

Accepted Answer

A) True 
 B)False

Question 3

Along with stability, all of the following are characteristics of money except

Accepted Answer

A)   durability.
B)   profitability.
C)   difficulty of counterfeiting.
D)   portability.
E)   divisibility.F) B) and D)
G) A) and B)

Question 4

In order to meet its reserve requirement, ABC Bank can borrow money from other banks at the federal funds rate.

Accepted Answer

A) True 
 B)False

Question 5

All of the following are time deposits except

Accepted Answer

A)   money-market mutual fund shares.
B)   short-term government securities.
C)   an interest-bearing savings account.
D)   a checking account.
E)   certificates of deposit.F) None of the above
G) A) and B)

Question 6

The typical dollar bill has an expected life span of

Accepted Answer

A)   less than two years.
B)   about six months.
C)   three years.
D)   five years.
E)   seven years.F) B) and E)
G) C) and E)

Question 7

Joe Barnes opened up an account at Community Credit Union. He is allowed to write checks and earns interest as long as he keeps his account balance above $2,000. In all likelihood, he opened a

Accepted Answer

A)   certificate of deposit.
B)   savings account.
C)   mutual bank account.
D)   NOW account.
E)   certified account.F) A) and B)
G) A) and C)

Question 8

Thad deposits $2,000 in an interest-bearing savings account. This means that Thad has $2,000 in

Accepted Answer

A)   demand deposits.
B)   time deposits.
C)   money supply.
D)   checking accounts.
E)   available accounts.F) C) and E)
G) A) and B)

Question 9

One method the Federal Reserve System uses to slow the economy is to

Accepted Answer

A)   sell government bonds to banks and other businesses.
B)   decrease reserve requirements.
C)   decrease the discount rate.
D)   buy government securities.
E)   decrease salaries paid to the board of governors.F) A) and C)
G) D) and E)

Question 10

When Skye purchases a meal at Hardee's, she will probably use the most common form of money today, which is

Accepted Answer

A)   gold.
B)   a credit card.
C)   a debit card.
D)   currency.
E)   bartering.F) A) and D)
G) A) and E)

Question 11

What are the primary functions of the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Association (NCUA)?

Accepted Answer

The Federal Deposit Insurance Corporatio...

Question 12

The person using a banker's acceptance to pay for merchandise can specify the conditions under which a specified dollar amount will be paid to the person who holds the banker's acceptance.

Accepted Answer

A) True 
 B)False

Question 13

The United States trades a shipment of wheat to Saudi Arabia in exchange for a shipment of oil. This type of arrangement is called

Accepted Answer

A)   an exchange medium.
B)   barter.
C)   an auction.
D)   a moneyless transfer.
E)   electronic commerce.F) B) and E)
G) A) and D)

Question 14

The Credit Card Act of 2009 provides new measures of accountability for credit card companies.

Accepted Answer

A) True 
 B)False

Question 15

Businesses generally use short-term loans to obtain new equipment and fund expansion.

Accepted Answer

A) True 
 B)False

Question 16

Most of the secretaries at Bingham Insurance Company like to see their paychecks, but not Cynthia Woodward. She signed a special form giving the company permission to transfer her salary directly to her bank account. Companies like Bingham are able to do this through

Accepted Answer

A)   electronic teller machines.
B)   automated clearinghouses.
C)   automated teller machines.
D)   point-of sale terminals.
E)   bill payments by telephone.F) A) and D)
G) A) and C)

Question 17

The usual passbook savings account at a commercial bank earns

Accepted Answer

A)   between 0.10 and 0.90 percent.
B)   about 1.5 percent.
C)   between 1.5 and 5.0 percent.
D)   a rate that is adjusted annually.
E)   a rate that is adjusted every two years.F) A) and E)
G) C) and E)

Question 18

When money does not retain its value over a period of time, people tend to lose faith in their monetary system and turn to other means of storing wealth.

Accepted Answer

A) True 
 B)False

Question 19

Michael's total purchase at Subway is $7.58. He pays with a ten dollar bill knowing he will receive the appropriate change because money is

Accepted Answer

A)   portable.
B)   durable.
C)   stable.
D)   multipliable.
E)   divisible.F) C) and D)
G) B) and C)

Question 20

When you make a purchase with a ___, funds are electronically subtracted from your bank account at the moment the purchase is made.

Accepted Answer

A)   credit card
B)   check
C)   debit card
D)   short-term loan
E)   NOW checking accountF) A) and D)
G) A) and E)

Exam 18: Understanding Money, Banking, and Credit

The Credit Card Act of 2009 provides new measures of accountability for credit card companies.

Correct AnswerverifiedShow Answer

Michael's total purchase at Subway is $7.58. He pays with a ten dollar bill knowing he will receive the appropriate change because money is

Correct AnswerverifiedShow Answer

A loan that is approved before the money is actually needed is called a(n)

Correct AnswerverifiedShow Answer

The usual passbook savings account at a commercial bank earns

Correct AnswerverifiedShow Answer

What are the primary functions of the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Association (NCUA)?

Correct AnswerAnswered by ExamLex AIThe Federal Deposit Insurance Corporatio...View AnswerShow Answer

The typical dollar bill has an expected life span of

Correct AnswerverifiedShow Answer

Businesses generally use short-term loans to obtain new equipment and fund expansion.

Correct AnswerverifiedShow Answer

The United States trades a shipment of wheat to Saudi Arabia in exchange for a shipment of oil. This type of arrangement is called

Correct AnswerverifiedShow Answer

Joe Barnes opened up an account at Community Credit Union. He is allowed to write checks and earns interest as long as he keeps his account balance above $2,000. In all likelihood, he opened a

Correct AnswerverifiedShow Answer

When money does not retain its value over a period of time, people tend to lose faith in their monetary system and turn to other means of storing wealth.

Correct AnswerverifiedShow Answer

Most of the secretaries at Bingham Insurance Company like to see their paychecks, but not Cynthia Woodward. She signed a special form giving the company permission to transfer her salary directly to her bank account. Companies like Bingham are able to do this through

Correct AnswerverifiedShow Answer

One method the Federal Reserve System uses to slow the economy is to

Correct AnswerverifiedShow Answer

When Skye purchases a meal at Hardee's, she will probably use the most common form of money today, which is

Correct AnswerverifiedShow Answer

When you make a purchase with a ___, funds are electronically subtracted from your bank account at the moment the purchase is made.

Correct AnswerverifiedShow Answer

In order to meet its reserve requirement, ABC Bank can borrow money from other banks at the federal funds rate.

Correct AnswerverifiedShow Answer

For customers who do their banking solely online, the largest disadvantage is the increased security threat.

Correct AnswerverifiedShow Answer

All of the following are time deposits except

Correct AnswerverifiedShow Answer

The person using a banker's acceptance to pay for merchandise can specify the conditions under which a specified dollar amount will be paid to the person who holds the banker's acceptance.

Correct AnswerverifiedShow Answer

Thad deposits $2,000 in an interest-bearing savings account. This means that Thad has $2,000 in

Correct AnswerverifiedShow Answer

Along with stability, all of the following are characteristics of money except

Correct AnswerverifiedShow Answer

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The Federal Deposit Insurance Corporatio...
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