BANKING 19-20 FINAL EXAM Q&A
Which of the following is NOT a function of the Federal Reserve? - Answer-levying a
high tax on state bank notes
A fixed exchange rate ties the monetary value of one country's currency to the
valuation of another country's currency. - Answer-True
The Truth in Lending Act prohibits bill collectors from using deceptive or abusive
tactics - Answer-False
Which of the following attempts to protect the information that credit bureaus may
collect? - Answer-Fair Credit Reporting Act
Janet Yellen began her term as chair of the Federal Reserve in 2014. - Answer-True
Almost all economists agree that the federal government can effectively regulate the
economy by raising or lowering taxes and expenditures. - Answer-False
The Uniform Bank Performance Report is an annual report issued to summarize the
performance of international banks operating within the United States. - Answer-
False
Which of the following statements is NOT true? - Answer-Credit bureaus may not
report information more than one year old.
If the government restricts the flow of cash into the economy too severely, - Answer-
consumers cannot afford to borrow.
An increase in money supply and incomes often causes prices to go up as well. -
Answer-True
Which of the following is NOT an example of an agency that is focused on making
banking safe and mutually beneficial across international borders? - Answer-
President's Working Group on Financial Markets
By law, every bank in the United States must be part of the Federal Reserve System.
- Answer-False
The rate of interest the Federal Reserve charges banks for short-term loans is called
the - Answer-discount rate
The Strength of Support Assessment (SOSA) report is a quarterly report filed by U.S.
banks to summarize how each of the bank's branches is performing. - Answer-False
One of the main functions of the Federal Reserve is to serve as a bank for other
banks. - Answer-True
The International Monetary Fund (IMF) works to promote economic growth among
member countries. - Answer-True
, The "a" in CAMELS stands for - Answer-asset adequacy
Which of the following is NOT part of the ongoing organizational structure of the
Federal Reserve? - Answer-Primary Dealer Credit Facility
Money on deposit, minus ____________________, can be loaned by banks to
customers. - Answer-the reserve requirement
Banks can loan customers the money they have on deposit, minus the reserve
requirement. - Answer-True
If there is too much money moving in the economy - Answer-prices may rise,
causing inflation.
The flow of money has a direct effect on how the economy performs. - Answer-True
Generally speaking, when interest rates are high more credit is accessible and the
economy tends to grow quickly. - Answer-False
MZM is sometimes referred to as the "base" money supply. - Answer-false
The official currency of the United States can properly be classified as - Answer-fiat
money
The prime rate is usually the same among major banks. - Answer-True
The interest rate the Federal Reserve charges for loans to member banks is called
the - Answer-discount rate.
The agreed-upon value of money in the United States today is based on the
government's supply of gold at Fort Knox, Kentucky. - Answer-False
Which of the following elements of the money supply, as defined by the Federal
Reserve, can be spent immediately? - Answer-M1
Most large money transactions involve ledger entries rather than the movement of
physical currency. - Answer-True
A dollar bill represents an obligation of the government to provide something of value
to you. - Answer-True
The Federal Reserve influences the federal funds rate by - Answer-buying and
selling government securities.
Which of the following assets is the most liquid? - Answer-the money in your wallet
Which of the following is NOT considered a factor in money creation? - Answer-the
printing of currency by the Bureau of Engraving and Printing
Which of the following is NOT a function of the Federal Reserve? - Answer-levying a
high tax on state bank notes
A fixed exchange rate ties the monetary value of one country's currency to the
valuation of another country's currency. - Answer-True
The Truth in Lending Act prohibits bill collectors from using deceptive or abusive
tactics - Answer-False
Which of the following attempts to protect the information that credit bureaus may
collect? - Answer-Fair Credit Reporting Act
Janet Yellen began her term as chair of the Federal Reserve in 2014. - Answer-True
Almost all economists agree that the federal government can effectively regulate the
economy by raising or lowering taxes and expenditures. - Answer-False
The Uniform Bank Performance Report is an annual report issued to summarize the
performance of international banks operating within the United States. - Answer-
False
Which of the following statements is NOT true? - Answer-Credit bureaus may not
report information more than one year old.
If the government restricts the flow of cash into the economy too severely, - Answer-
consumers cannot afford to borrow.
An increase in money supply and incomes often causes prices to go up as well. -
Answer-True
Which of the following is NOT an example of an agency that is focused on making
banking safe and mutually beneficial across international borders? - Answer-
President's Working Group on Financial Markets
By law, every bank in the United States must be part of the Federal Reserve System.
- Answer-False
The rate of interest the Federal Reserve charges banks for short-term loans is called
the - Answer-discount rate
The Strength of Support Assessment (SOSA) report is a quarterly report filed by U.S.
banks to summarize how each of the bank's branches is performing. - Answer-False
One of the main functions of the Federal Reserve is to serve as a bank for other
banks. - Answer-True
The International Monetary Fund (IMF) works to promote economic growth among
member countries. - Answer-True
, The "a" in CAMELS stands for - Answer-asset adequacy
Which of the following is NOT part of the ongoing organizational structure of the
Federal Reserve? - Answer-Primary Dealer Credit Facility
Money on deposit, minus ____________________, can be loaned by banks to
customers. - Answer-the reserve requirement
Banks can loan customers the money they have on deposit, minus the reserve
requirement. - Answer-True
If there is too much money moving in the economy - Answer-prices may rise,
causing inflation.
The flow of money has a direct effect on how the economy performs. - Answer-True
Generally speaking, when interest rates are high more credit is accessible and the
economy tends to grow quickly. - Answer-False
MZM is sometimes referred to as the "base" money supply. - Answer-false
The official currency of the United States can properly be classified as - Answer-fiat
money
The prime rate is usually the same among major banks. - Answer-True
The interest rate the Federal Reserve charges for loans to member banks is called
the - Answer-discount rate.
The agreed-upon value of money in the United States today is based on the
government's supply of gold at Fort Knox, Kentucky. - Answer-False
Which of the following elements of the money supply, as defined by the Federal
Reserve, can be spent immediately? - Answer-M1
Most large money transactions involve ledger entries rather than the movement of
physical currency. - Answer-True
A dollar bill represents an obligation of the government to provide something of value
to you. - Answer-True
The Federal Reserve influences the federal funds rate by - Answer-buying and
selling government securities.
Which of the following assets is the most liquid? - Answer-the money in your wallet
Which of the following is NOT considered a factor in money creation? - Answer-the
printing of currency by the Bureau of Engraving and Printing
