SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
Search
Test your basic knowledge |
The Banking System
Start Test
Study First
Subject
:
industries
Instructions:
Answer 36 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. The item commonly used to pay for goods - services - assets & outstanding debts
money
discount rate
deposit expansion multiplier
required reserves
2. The multiple by which an increase in reserves will increase the money supply. It is inversely related to the required reserve ratio.
demand deposits
federal funds market
deposit expansion multiplier
open market operations
3. The sum of (1) currency in circulation (including coins) - (2) checkable deposits maintained in depository institutions - and (3) traveler's checks.
Federal Deposit Insurance Corporation (FDIC)
M1 (money supply)
What does the Federal Reserve do?
3 Major centers of decision making within the Federal Reserve
4. Unit of measurement used by people to post prices & keep track of revenues &costs
fiat money
fractional reserve banking
credit unions
unit of account
5. The metal or paper medium of exchange
required reserves
currency
medium of exchange
liquid asset
6. An asset that will allow people to transfer purchasing power from one period to the next
federal funds market
depository institutions
Federal Reserve System
store of value
7. The currency banks hold in their vaults plus their deposits at the Federal Reserve
Federal Deposit Insurance Corporation (FDIC)
bank reserves
federal funds market
Federal Open Market Committee
8. The interest rate on the loans that the Fed makes to banks
discount rate
commerical banks
What does the U.S. Treasury do?
deposit expansion multiplier
9. 1. Oversees the monetary climate of the economy 2. Does not issue bonds 3. Determines the money supply
credit
federal funds market
savings and loan associations
What does the Federal Reserve do?
10. The decion making center of the Federal Reserve
board of governors
open market operations
credit unions
credit
11. 1. Board of governors 2. District & Regional Banks 3. Federal open market committee
required reserve ratio
What does the Federal Reserve do?
3 Major centers of decision making within the Federal Reserve
savings and loan associations
12. An asset that is used to buy and sell goods or services
medium of exchange
store of value
federal funds market
required reserve ratio
13. Balances in bank accounts that depositors can access on demand by writing a check (checking accounts)
deposit expansion multiplier
depository institutions
discount rate
demand deposits
14. Funds acquired by borrowing
credit
required reserves
medium of exchange
commerical banks
15. An institution designed to oversee the banking system and regulate the quantity of money in the economy
central bank
required reserve ratio
demand deposits
bank reserves
16. The minimum amount of reserves that a bank is required by law to keep on hand to back up its deposits. If reserve requirements were 15 percent - banks would be required to keep $150000 in reserves against each $1 million of deposits.
required reserves
savings and loan associations
M2 (money supply)
3 Major centers of decision making within the Federal Reserve
17. Financial institutions that offer a wide range of services (checking - savings etc.)
store of value
unit of account
discount rate
commerical banks
18. An asset that can be easily & quickly converted to cash
money market mutual funds
M2 (money supply)
liquid asset
central bank
19. Buying and selling of government securities in the open market by the Fed
savings and loan associations
liquid asset
open market operations
3 Major centers of decision making within the Federal Reserve
20. Interest earning accounts offered by brokerage firms that pool depositor;s funds and invest them in highly liquid short-term securities
required reserve ratio
credit unions
board of governors
money market mutual funds
21. The sum of currency in circulation plus bank reserves (vault cash and reserves with the Fed). It reflects the stock of U.S. securities held by the Fed.
credit unions
commerical banks
monetary base
bank reserves
22. Money that has no intrinsic value nor the backing of a commodity with intrinsic value. paper currency is an example
credit unions
fiat money
liquid asset
required reserves
23. The central bank of the United States; it carries out banking regulatory policies and is responsible for the conduct of monetary policy
Federal Reserve System
currency
Federal Deposit Insurance Corporation (FDIC)
What does the Federal Reserve do?
24. 1. Oversees the finances of the federal government 2.Issues bonds to the public to finance the budget deficits of the goverment 3. Does not determine the money supply
deposit expansion multiplier
central bank
bank reserves
What does the U.S. Treasury do?
25. Reserves greater than the required amounts
M1 (money supply)
required reserves
Federal Open Market Committee
excess reserves
26. Financial institutions that accept deposits in exchange for shares that pay dividends.
federal funds market
commerical banks
savings and loan associations
store of value
27. A loanable funds market in which banks seeking additional reserves borrow short-term funds (generally for seven days or less) from banks with excess reserves. The interest rate in this market is called the federal funds rate.
What does the U.S. Treasury do?
federal funds market
commerical banks
excess reserves
28. A financial institution owned by its members that provides savings and checking accounts and other services to its membership at low fees.
liquid asset
potential deposit expansion multiplier
credit unions
central bank
29. A committee of the Federal Reserve system that establishes Fed policy with reguard to the buying & selling of gov. securities - Primary mechanism used to control the money supply -.Composed of the 7 members of the Board of Governors and the 12 distri
Federal Open Market Committee
demand deposits
central bank
potential deposit expansion multiplier
30. Businesses that accept checking and savings deposits and use a portion of them to extend loans and make investments. Banks - savings and loan associations - and credit unions are examples.
savings and loan associations
M1 (money supply)
open market operations
depository institutions
31. Equal to M1 plus (1) savings deposits - (2) time deposits (accounts of less than $100000) held in depository institutions - and (3) money market mutual fund shares.
open market operations
What does the U.S. Treasury do?
money market mutual funds
M2 (money supply)
32. A system that permits banks to hold reserves of less than 100% against their deposits
fractional reserve banking
liquid asset
Federal Reserve System
What does the U.S. Treasury do?
33. The minimum fraction of deposits banks are required by law to keep as reserves.
required reserve ratio
depository institutions
M2 (money supply)
Federal Deposit Insurance Corporation (FDIC)
34. A government corporation that insures bank deposits
depository institutions
federal funds market
potential deposit expansion multiplier
Federal Deposit Insurance Corporation (FDIC)
35. The maximum potential increase in the money supply as a ratio of the new reserves injected into the banking system. It is equal to the inverse of the required reserve ratio.
federal funds market
open market operations
deposit expansion multiplier
potential deposit expansion multiplier
36. An asset that can be easily & quickly converted to purchasing power
M1 (money supply)
demand deposits
What does the Federal Reserve do?
liquid asset