Money and Banking Quiz

What is money commonly accepted as in exchange for goods and services?

• A) A medium of exchange

• B) A form of credit

• C) A type of loan

• D) A savings account

What is the term used for coins and notes printed by the government?

• A) Deposits

• B) Currency

• C) Checks

• D) Debit cards

What type of bank account is typically used for daily transactions and comes with a debit card?

• A) Savings account

• B) Loan account

• C) Checking account

• D) Credit account

What is the main reason banks accept deposits?

• To insure the money with the federal government.

• To keep money in reserve to handle withdrawals.

• To lend the money to other people.

• To pay higher interest rates to depositors.

How do banks make profits from loans according to the text?

• By charging a fee for borrowing that is higher than the interest paid to savers.

• By investing in high-return stocks and shares.

• By keeping all the money in reserve and not lending it.

• By insuring the deposits with the federal government.

What is the effect of lending on the economy as described in the text?

• It decreases the amount of money available to spend.

• It increases the amount of money available to spend.

• It has no effect on the amount of money available to spend.

• It leads to a decrease in the number of businesses.

What is the primary role of the Federal Reserve?

• To provide loans to the public

• To keep the United States' economy healthy

• To print and engrave coins and currency

• To supervise the alien technology

How many Federal Reserve Banks are there in the United States?

• 5

• 10

• 12

• 20

What are the three goals of the Federal Reserve to ensure a healthy economy?

• Increasing taxes, reducing inflation, and promoting exports

• Reducing unemployment, increasing exports, and controlling interest rates

• Making sure the highest possible number of citizens have jobs, keeping the price of goods and services stable, and ensuring the cost of a loan is not too high or too low

• Printing more money, supervising banks, and providing loans to businesses

Why does the Federal Reserve adjust loan interest rates?

• To control the number of loans taken by the public

• To manage the supply of "stuff" and prevent excessive inflation

• To ensure that the economy grows as fast as possible

• To increase the amount of money in circulation