Unit 2: Banking Concepts - End-of-Unit Assessment

Which of the following is considered a primary function of money?

• Providing loans

• Medium of exchange

• Collecting taxes

• Regulating prices

Which of the following best describes a key function of banks in the economy?

• Setting tax rates for citizens.

• Facilitating the flow of funds between depositors and borrowers.

• Regulating all stock market activity.

• Issuing government bonds directly to the public.

What was a key reason for the creation of the Federal Reserve System in 1913?

• To allow banks to print their own money.

• To regulate the nation's money supply and promote financial stability.

• To provide loans only to large corporations.

• To guarantee profits for private banks.

Which term refers to the amount paid to a lender for the use of borrowed funds, usually shown as a percentage?

• Balance

• Interest

• Credit

• Loan

Which of the following institutions accepts deposits from the public?

• A finance company

• An investment bank

• A commercial bank

• An insurance agency

Retail banking primarily caters to the needs of which group?

• Multinational companies.

• Individual customers.

• Non-profit organizations.

• Central banks.

Which of the following is a typical service provided by a bank's commercial division?

• Home mortgage loans

• Business checking accounts

• Retirement savings plans

• Personal credit cards

Which banking division earns most of its income from interest on loans provided for purchasing homes and real estate?

• Retail banking

• Trust services

• Mortgages

• IT department

What is one main reason for government oversight of banks?

• To increase bank fees for customers.

• To maintain trust in the financial system and protect depositors.

• To require banks to open more branches.

• To limit the number of loans banks can give.

Which major financial reform law was passed in response to the 2008 financial crisis?

• Glass-Steagall Act

• Sarbanes-Oxley Act

• Dodd-Frank Act

• Gramm-Leach-Bliley Act