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Which of the following does the Federal Reserve use to regulate the nation's money supply?
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(Got Correct)
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Correct Answer : C: Monetary policy - correct answer- t t t t t t tt t




Reason : The Federal Reserve uses monetary policy to regulate the nation's money supply.
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Monetary policy is directed at expanding or contracting the supply of money and credit in the t t t t t t t t t t t t t t t t




U.S. economy. In theory, if there is too little money in circulation, consumers will spend less, i
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nterest rates will be high, and unemployment will rise. In this situation, the Fed can deliberat
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ely increase the amount of money in circulation, leading to lower interest rates, increases in
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consumer spending, and higher employment rates. If there is too much money in circulation t t t t t t t t t t t t t




, however, prices rise and the value of the dollar decreases (inflation)
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Purchases made with your debit card are usually: (Correct) t t t t t t t t




Correct Answer : A: Deducted immediately from your checking account - correct answer-
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Reason : Debit card purchases are immediately deducted from your checking account bala
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nce while credit card purchases are added to your credit card balance. You have about 20 da
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ys after receiving a credit card bill to pay it without being charged interest. Through the use of
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a credit card, you get use of goods or services before they are paid for.
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The common name for U.S. currency is: (Correct)
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Correct Answer : C: Green backs - correct answer- t t t t t t tt t




Reason : The background color of all United States currency (bills) is primarily green.
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Question 4 : Jami lost her debit card. She did not report it missing for 3 months. If an unauthori
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zed person used her debit card, her maximum liability is: (Correct)
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Correct Answer : C: Unlimited liability - correct answer- t t t t t t tt t




Reason : According to the Electronic Fund Transfer Act, if a consumer reports the theft or los
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s of an ATM or debit card to the issuing financial institution within two business days, he/she i
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s liable for not more than $50 of unauthorized purchases. If reported within 60 days, the cons
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umer is liable for up to $500 of unauthorized purchases. If reported after 60 days or not report
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ed, the consumer may be liable for the entire amount of unauthorized purchases.
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Question 5 : Identify the background color of a U.S. $5.00 bill. (Correct) t t t t t t t t t t t t




Correct Answer : C: Green - correct answer- t t t t t tt t




Reason : The background color of all United States paper currency (bills) is green.
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Question 6 : Scott just got an ATM card to use and must choose a PIN (Personal Identificatio
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n Number). How should he select a PIN that will give him maximum protection against anyon
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e else being able to find out what the PIN is? (Incorrect)
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, Correct Answer : B: Use a random selection of letters and numbers - correct answer- t t t t t t t t t t t t tt t




Reason : A PIN (personal identification number) is a secret code that protects the privacy of y
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our accounts and allows only you to access them. The numbers should not be composed of n
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umbers easily associated with the person choosing the PIN such as birth date, telephone nu
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mber, or street number address. It should be a random series of numbers and letters that wo
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uld be hard for unauthorized users to guess. Also, never write your PIN on your ATM or debit
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card or in your check book because then a thief would you?re your confidential information n
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eeded to make purchases or withdraw all the money out of your account.
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Question 7 : A type of electronic funds transfer (EFT) is: (Correct) t t t t t t t t t t t




Correct Answer : D: An ATM transaction - correct answer- t t t t t t t tt t




Reason : According to the Electronic Funds Transfer Act, Electronic funds transfers (EFTs) t t t t t t t t t t t t t




are any transfers of funds, other than a transaction originated by check, draft, or other paper i
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nstrument, initiated through electronic terminal, telephone, or computer, to authorize a fina t t t t t t t t t t t




ncial institution to debit or credit an account. EFT's can be used to carry out many financial tra
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nsactions, for example, to pay utility bills, make installment loan payments, and transfer fun t t t t t t t t t t t t t




ds from a savings account to a checking account or vice versa.
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Question 8 : A high school student has begun to investigate the field of finance as a career ch t t t t t t t t t t t t t t t t t t




oice. In deciding about the field, the student should focus on which question first? (Correct)
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Correct Answer : A: Will I find a balance between financial rewards and personal satisfaction
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from work? - correct answer- t t tt t




Reason : It is important to investigate a career with the idea of not only getting a sense of earni
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ng potential, types of positions available and the training necessary to acquire these positio
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ns but what are the chances that the individual will enjoy working in this field.
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Question 9 : t t t




Nora needed to make a long- t t t t t




distance call from a pay phone and did not have the cash. She was able to make the call by usi t t t t t t t t t t t t t t t t t t t t




ng her: (Correct)
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Correct Answer : C: Cash card - correct answer- t t t t t t tt t




Reason : Consumers purchase cash cards for a specific amount of money. The amount pai t t t t t t t t t t t t t t




d is stored in the card's memory, and the card can be used to pay for goods or services specifi
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c to a particular store or action until the amount stored, or "loaded" on the card, has been spen
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t. The type of cash card Nora used is called a phone card. Some retail chain stores sell cash c
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ards which can be used to pay for their products. Cash cards are either disposable or re-
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loadable. Disposable cash cards cannot be replenished (loaded again). With re- t t t t t t t t t t




loadable cash cards, the consumer can return to the merchant and pay to have the balance o t t t t t t t t t t t t t t t t




n the card replenished.
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Question 10 : A cash card generally: (Incorrect) t t t t t t t




Correct Answer : B: Is purchased with a specific amount of money that can be used to pay for
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goods or services - correct answer- t t t tt t




Reason : Consumers purchase cash cards for a specific amount of money. The amount pai t t t t t t t t t t t t t t




d is stored in the card's memory, and the card can be used to pay for goods or services specifi
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c to a particular store or action until the amount stored, or "loaded" on the card, has been spen
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t. Some retail chain stores sell cash cards which can be used to pay for their products. Cash c
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ards are either disposable or re-
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loadable. Disposable cash cards cannot be replenished (loaded again). With re- t t t t t t t t t t