Chapter 2 - Test Bank
Historically, a commercial bank was defined as a firm that:
A) Accepted NOW accounts and made consumer loans.
B) Accepted demand deposits and made business loans.
C) Accepted government deposits and made public loans.
D) Accepted demand deposits and made consumer loans.
E) Is regulated by the Federal Reserve. -✔✔B) Accepted demand deposits and made business loans.
Which of the following is not a purpose of bank regulation?
A) Guarantee minimal profitability of the banking system.
B) Provide monetary stability.
C) Ensure safety and soundness of banks.
D) Provide a competitive financial system.
E) Protect consumers from abuses by banks. -✔✔A) Guarantee minimal profitability of the banking
system.
A primary purpose of maintaining the safety and soundness of banks is to:
A) Encourage loan growth.
B) Protect depositors.
C) Ensure liquidity for the stock market.
D) Prevent discrimination.
E) Minimize bank losses. -✔✔B) Protect depositors.
Historically, a commercial bank was defined as a firm that:
A) Accepted NOW accounts and made consumer loans.
B) Accepted demand deposits and made business loans.
C) Accepted government deposits and made public loans.
D) Accepted demand deposits and made consumer loans.
E) Is regulated by the Federal Reserve. -✔✔B) Accepted demand deposits and made business loans.
Which of the following is not a purpose of bank regulation?
A) Guarantee minimal profitability of the banking system.
B) Provide monetary stability.
C) Ensure safety and soundness of banks.
D) Provide a competitive financial system.
E) Protect consumers from abuses by banks. -✔✔A) Guarantee minimal profitability of the banking
system.
A primary purpose of maintaining the safety and soundness of banks is to:
A) Encourage loan growth.
B) Protect depositors.
C) Ensure liquidity for the stock market.
D) Prevent discrimination.
E) Minimize bank losses. -✔✔B) Protect depositors.
