BUSN 70 Exam 2 Review

What are the functions of Money?

Select Multiple

• Medium of Exchange

• Measure of Value

• Store of value

• Facilitating Taxation

Which of the following is not a characteristic of money?

• Acceptability

• Portability

• Durability

• Ability to generate interest

What does The Federal Reserve (Fed) not do?

• Managing the United States’ international trade agreements.

• Regulating and supervising the banking system

• Controlling the money supply

• Setting national interest rates to influence the economy

• Supervises the FDIC insurance program

What is the Fed's Dual Mandate?

• To regulate international trade and protect consumer rights.

• To control the federal budget and manage public debt.

• To promote maximum employment and long term economic growth

• To oversee the stock market and prevent financial fraud.

Which of the following Federal Reserve tools is most commonly employed to influence the U.S. economy?

• Open Market Operations

• Reserve Requirements

• Discount Rate

• Credit Control

 Mutual Saving Banks were originally established for groups of people (like fishermen) to have a safe place for their savings.

• True

• False

Which business structure allows for an unlimited number of owners, offers limited liability, and is taxed as a partnership?

• Sole Proprietorship

• Partnership

• Corporation

• Limited Liability Company

What is a key advantage of a sole proprietorship?

• Limited liability for the owner

• Ease of formation and direct control by the owner

• Ability to raise capital easily through the sale of stock

• Taxation at both the corporate and individual levels

What is a key advantage of forming a corporation?

• Simplified tax filing for the owners

• Limited liability for shareholders

• Employee-Owner seperation

• Double taxation

Which of the following is true about a private corporation?

• It is required to disclose its financial information publicly.

• It is owned by just one or a few people closely involved in managing the business.

• It regularly sells stock to the public.

• It must remain private and cannot become a public corporation.