WorksheetsUnit 5: Money, Banking & the Fed
Total questions: 25
Worksheet time: 13mins
What was the earliest way people exchanged goods/services in ancient civilizations?
Paper currency
Gold coins
Barter system
Digital currency
Which of the following is NOT a function of banks?
Keep money and valuables safe
Printing currency
Offer customers interest on deposits
Loans
Offering financial advice
What is the primary role of the Federal Reserve?
Printing money
Providing for a safe and stable economy
Setting tax rates
Managing government spending
Which of the following is a tool of monetary policy?
Taxation
Government spending
Setting the Discount (interest) Rate
Trade tariffs
Which of the following is NOT a function of money?
Medium of exchange
Store of value
Unit of account
Source of entertainment
What does the 'Character' in the 3 C's of Lending refer to?
The borrower's credit history
The borrower's assets
The borrower's income
The borrower's education
Which event is the overall main cause of the 2008 Financial Crisis?
The dot-com bubble burst
Banks issued too many subprime loans
The Enron scandal
The 9/11 attacks
Why might the Federal Reserve raise the interest rate?
To control inflation
To regulate stock markets
To manage government debt
To set tax rates
Which of the following best describes 'Capital' in the 3 C's of Lending?
The borrower's credit score
The borrower's assets and net worth
The borrower's income
The borrower's employment history
Which of the following is a primary function of the Federal Reserve?
Collecting taxes
Managing the national debt
Conducting monetary policy
Regulating international trade
What is the main goal of monetary policy?
To increase government revenue
To control inflation and stabilize the economy
To reduce unemployment
To regulate international trade
Which of the following is an example of a 'store of value' function of money?
Using money to buy groceries
Saving money in a bank account
Using money to measure the price of a car
Using money to pay taxes
What does the 'Capacity' in the 3 C's of Lending refer to?
The borrower's ability to repay the loan
The borrower's credit history
The borrower's assets
The borrower's education
Which of the following was a major cause of the 2008 Financial Crisis?
High oil prices
Subprime mortgage lending
Trade deficits
High inflation
What is the primary function of commercial banks?
Issuing government bonds
Providing financial services to individuals and businesses
Regulating the stock market
Setting interest rates
Which of the following best describes the 'unit of account' function of money?
Money is used to buy goods and services
Money is used to save for future use
Money is used to measure and compare the value of goods and services
Money is used to pay off debts
What was one of the key actions taken by the Federal Reserve during the 2008 Financial Crisis?
Increasing interest rates
Decreasing the money supply
Providing $700 billion in emergency loans to banks
Raising taxes
What is the discount rate?
The interest rate charged by commercial banks on loans to customers
The interest rate charged by the Federal Reserve on loans to commercial banks
The interest rate on government bonds
The interest rate on savings accounts
Which of the following is a characteristic of a central bank?
It operates for profit
It is owned by private individuals
It manages the country's monetary policy
It provides loans to the general public
What is the purpose of reserve requirements set by the Federal Reserve?
To control the amount of money banks can lend
To increase government revenue
To regulate international trade
To set tax rates
Which of the following best describes the 'medium of exchange' function of money?
Money is used to measure the value of goods and services
Money is used to save for future use
Money is used to facilitate transactions
Money is used to pay off debts
What was a significant consequence of the 2008 Financial Crisis?
Decrease in global trade
Increase in oil prices
Collapse of the housing market
Rise in inflation
What is the main objective of the Federal Reserve's monetary policy?
To increase government spending
To control inflation and stabilize the economy
To regulate international trade
To reduce the national debt
What may the bank do with the money in your savings account?
Use it to create a sculpture in the bank
Let you take it out whenever you want with your debit card
Use it to throw a party
Use it to give out loans to other customers
What is the largest source of revenue for most banks?
Fees and service charges
New checking accounts
Interest on loans
Tariffs
