Money and Banking Quiz

What is the primary function of money?

• Production

• Distribution

• Medium of exchange

• Consumption

Which of the following is not a function of money?

• Medium of exchange

• Store of value

• Unit of account

• Measure of elasticity

Which of the following is considered near money?

• Coins

• Demand deposits

• Savings accounts

• Cash

What is the central bank of the United States called?

• World Bank

• Federal Reserve System

• International Monetary Fund

• U.S. Treasury

Commercial banks create money primarily by:

• Printing currency

• Making loans

• Accepting deposits

• Selling assets

Which monetary policy tool involves buying and selling government securities?

• Reserve requirement

• Discount rate

• Open market operations

• Fiscal policy

An increase in the reserve requirement will likely:

• Increase money supply

• Decrease money supply

• Have no effect

• Increase inflation

The interest rate charged by central banks to commercial banks is called:

• Prime rate

• Repo rate

• Discount rate

• Deposit rate

What backs the value of fiat money?

• Gold reserves

• Silver reserves

• Government decree

• Commodity supply

Which of the following is a liability for a bank?

• Loans given

• Vault cash

• Customer deposits

• Bank buildings