Module 2 Quiz

What is the most common type of bank in the United States?

• Federal banks

• Investment banks

• Commercial banks

In the monetary system, credits cards are a form of loan

• True

• False

What are the functions of money ?

• Medium of exchange, store of value, Unit of account

• Medium of exchange, store of demand, value of money

• Stable, durable, acceptable

• Divisible, portable, scarce.

What is the central bank of the United States?

• JP Morgan Chase

• Commercial Banks

• Federal Reserve

Which of the following is an example of money as a unit of account?

• You purchase a remote-controlled toy on sale for $8.99

• You lend your best friend $250.00 to buy a guitar

• You open a savings account at a bank that pays high interest

• You compare camera prices at different stores before buying one

The main purpose of the FDIC is to make sure that:

• customers do not lose their money if a bank fails

• commercial and investment banks do not fail

• banks charge a fair amount of interest on loans

• the government has enough gold to cover its expenses

Savers and borrowers are linked through financial institutions when:

• savers deposit money that is used to lend money to borrowers

• both savers and borrowers invest in the same markets

• financial institutions offer the same exchange rate to each

• borrowers take money from financial institutions to invest

The chairperson of the Federal Reserve Bank is in control of

• the world's money supply

• the U.S. money supply

• the IMF

• fiscal policy

The Discount rate is used to regulate the

• amount of money the banks will borrow from the Fed Reserve

• the amount of government bonds individuals are able to buy

• the reserve requirement for banks

• amount of money you can claim if banks go bankrupt

Open market operations by the Federal Reserve bank relates to

• monitoring the reserve requirement

• the buying and selling of government bonds

• participating with the IMF

• increasing and decreasing interest rates