Understanding Money and Financial Institutions

What is money, what are its characteristics and functions, and what are the three parts of the U.S. money supply?

• Money is a medium of exchange, unit of account, and store of value; the three parts are currency, demand deposits, and savings deposits.

• Money is a form of credit, investment, and savings; the three parts are loans, bonds, and stocks.

• Money is a type of asset, liability, and equity; the three parts are cash, checks, and credit cards.

• Money is a form of wealth, income, and expenditure; the three parts are gold, silver, and copper.

How does the Federal Reserve manage the money supply?

• By setting interest rates, buying and selling government securities, and adjusting reserve requirements.

• By printing money, issuing bonds, and collecting taxes.

• By regulating stock markets, controlling inflation, and managing foreign exchange.

• By providing loans, insuring deposits, and offering financial advice.

What are the key financial institutions, and what role do they play in the process of financial intermediation?

• Banks, credit unions, and insurance companies; they facilitate the flow of funds from savers to borrowers.

• Stock exchanges, investment firms, and hedge funds; they manage investments and trade securities.

• Real estate agencies, mortgage lenders, and property developers; they finance and develop real estate projects.

• Retailers, wholesalers, and manufacturers; they produce and distribute goods and services.

How does the Federal Deposit Insurance Corporation (FDIC) protect depositors’ funds?

• By insuring deposits up to a certain limit, monitoring banks, and managing bank failures.

• By providing loans to banks, setting interest rates, and regulating financial markets.

• By issuing government bonds, collecting taxes, and managing the national debt.

• By offering investment advice, managing retirement funds, and trading securities.

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

• Facilitating international trade, providing foreign exchange services, and financing global operations.

• Regulating international stock markets, managing global investments, and issuing international bonds.

• Developing international real estate, managing global supply chains, and producing consumer goods.

• Offering travel services, managing tourism operations, and providing hospitality services.

What trends are reshaping financial institutions?

• Technological advancements, regulatory changes, and globalization.

• Agricultural developments, environmental policies, and cultural shifts.

• Political movements, educational reforms, and healthcare innovations.

• Artistic trends, fashion changes, and culinary advancements.

Who is the head of digital banking at Bank of America?

• Michelle Moore

• Erica Johnson

• Sarah Lee

• Emily Davis

What was Michelle Moore's approach to improving the bank's mobile app?

• Adding features to match bank branch capabilities

• Reducing the number of app features

• Removing AI and predictive analytics

• Limiting the app to basic services

What is the name of the digital assistant created by Moore's team?

• Erica

• Alexa

• Siri

• Cortana

What technology does the digital assistant Erica use to provide customer service?

• Artificial intelligence and predictive analytics

• Basic algorithms

• Manual customer service

• Simple automation