15. Financial Institutions Quiz

What are the three main components of the U.S. money supply?

• Currency, demand deposits, and time deposits

• Coins, gold, and silver

• Demand deposits, time deposits, and savings accounts

• Bonds, stocks, and mutual funds

Which institution insures deposits in commercial banks and thrift institutions in the United States?

• The Federal Deposit Insurance Corporation (FDIC)

• The Federal Reserve

• The U.S. Treasury

• The National Credit Union Administration

What is the primary function of the Federal Reserve System?

• To oversee the nation's monetary and credit system

• To provide loans to individuals

• To regulate the stock market

Which type of financial institution is not for profit and member-owned?

• Credit unions

• Commercial banks

• Insurance companies

• Brokerage firms

What is a key characteristic of money that makes it a suitable means of exchange?

• It must be scarce, durable, portable, and divisible

• It must be widely accepted by the government

• It must be available in unlimited quantities

• It must be backed by gold or silver

What role do U.S. banks play in the international marketplace?

• They provide loans and trade-related services to foreign governments and businesses

• They only operate within the United States

• They regulate international financial transactions

• They issue international currency

Which tool does the Federal Reserve use most frequently to manage the money supply?

• Discount rate

• Reserve requirements

• Open market operations

• Interest on reserves

What trend is influencing the future of financial institutions related to technology?

• Integration with financial technology (fintech) companies

• Decrease in online banking

• Increased use of physical bank branches

• Moving away from digital transactions

What is the maximum insurance coverage per depositor, per bank, provided by the FDIC?

• $250,000

• $100,000

• $200,000

• $500,000

How do nondepository financial institutions differ from depository institutions?

• They do not accept deposits but still offer financial services

• They only offer insurance products

• They are government-owned institutions

• They exclusively deal with foreign currencies