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Money and Financial Institutions: Homework Help Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Which of the following is FALSE regarding the Federal Reserve?

Question 2 2. How does high economic output lead to higher nominal interest rates?

Question 3 3. What type of bank is located in a foreign country and is used by your domestic bank to help their customers conduct business in the foreign country?

Question 4 4. Which of the following is an inaccurate description of The Federal Reserve?

Question 5 5. What will the purchase of government bonds from the public in the open market by the central bank do?

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Question 6 6. How can the government use fiscal policy to stimulate the economy in a financial crisis?

Question 7 7. Assume that the reserve requirement is 25%. If banks have excess reserves of $10,000, which of the following is the maximum amount of additional money that can be created by the banking system through the lending process?

Question 8 8. Money serves as a standard of deferred payment when:

Question 9 9. The fractional reserve system's ability to create money is reduced when

Question 10 10. Because the central bank controls the money supply, it also controls what other economic driver?

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Question 11 11. According to the T-account shown, if the required reserve ratio is 10%, what is the maximum amount of additional loans this bank can make?

Question 12 12. What happens when there is an increase in the demand for money when the supply of money is unchanged?

Question 13 13. What are some of the objectives of the Fed?

Question 14 14. Which of the following was NOT a cause of the financial crisis of 2008?

Question 15 15. What is the best explanation of monetary policy?

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Question 16 16. What happens when the government provides a tax incentive for businesses to invest?

Question 17 17. Why is a negative balance of payment bad for a country?

Question 18 18. Why was money created?

Question 19 19. The money multiplier is a relationship between which two drivers?

Question 20 20. If banks have excess reserves of $5,000, and the money supply increased by $20,000, what is the reserve ratio?

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Question 21 21. Lydia deposits $70,000 into the First National Bank of Ceelo. The required reserve ratio is 10%. How much will the money supply increase if the bank loans out excess reserves?

Question 22 22. Which of the following policies was NOT part of the Dodd-Frank Wall Street Reform and Consumer Protection Act?

Question 23 23. How would buying or selling government bonds affect the federal funds rate, if it was the government that initiated the sale?

Question 24 24. How does an affiliate bank and a subsidiary bank differ?

Question 25 25. Which one of the following is an activity in which a savings and loan association engages?

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Question 26 26. Assume that there are two parties to an exchange and that they value the goods they would receive as much as the goods they would give away. What do economists call this?

Question 27 27. Which of the following insures that the US dollar maintains its value?

Question 28 28. Which of the following is one of the primary goals of the IMF?

Question 29 29. When interest rates are 20%, the demand for money is:

Question 30 30. The Federal Reserve achieves its monetary goals by doing which of the following?

Money and Financial Institutions: Homework Help Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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