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Approximately how many commercial banks are now operating in the United States?


A) About 7,300.
B) About 6,000.
C) About 8,500.
D) About 6,800.

E) A) and D)
F) B) and C)

Correct Answer

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Stabilizing a nation's price level and the purchasing power of its money can be achieved:


A) only with fiscal policy.
B) only with monetary policy.
C) with both fiscal and monetary policy.
D) with neither fiscal nor monetary policy.

E) B) and C)
F) All of the above

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Which of the following programs involves the Federal Reserve directly purchasing short-term lending instruments from corporations?


A) Term Asset-Backed Securities Loan Facility.
B) Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility.
C) Commercial Paper Funding Facility.
D) Term Securities Lending Facility.

E) B) and D)
F) B) and C)

Correct Answer

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If you place a part of your summer earnings in a savings account,you are using money primarily as a:


A) medium of exchange.
B) store of value.
C) unit of account.
D) standard of value.

E) B) and C)
F) A) and B)

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The Federal Reserve System:


A) has the same status as the Supreme Court.
B) is basically an independent agency.
C) has the status of a congressional committee.
D) is an agency of the executive branch of the federal government.

E) None of the above
F) All of the above

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As of March 2009,the federal government and the Federal Reserve had spent $170 billion to keep AIG financially afloat.

A) True
B) False

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What is the primary function of the Term Asset-Backed Securities Loan Facility?


A) Provide funding support for collateralized securities such as student,auto,and credit card loans.
B) Provide securities loans to primary dealers for one-month terms.
C) Provide overnight loans to primary dealers willing to post loan-backed securities as collateral.
D) Provide loans to U.S.financial institutions to purchase commercial paper.

E) A) and B)
F) C) and D)

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Coins in people's pockets and purses are:


A) included in M1 but not in M2.
B) included both in M1 and in M2.
C) included in M2 but not in M1.
D) excluded from M1 and M2 because people can exchange them for Federal Reserve notes.

E) B) and C)
F) A) and B)

Correct Answer

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Currency held within banks is part of:


A) both the M1 and M2 definitions of the money supply.
B) the M2 definition of the money supply only.
C) the M1 definition of the money supply only.
D) none of these definitions of the money supply.

E) A) and D)
F) None of the above

Correct Answer

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In the financial industry,"securitization" refers to:


A) increasing insurance protection on bank deposits.
B) requiring greater down payments on home purchases to reduce mortgage default risk.
C) bundling groups of loans,bonds,mortgages,and other financial debts into new securities.
D) increasing collateral requirements on loans.

E) B) and C)
F) A) and D)

Correct Answer

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Near-monies:


A) include all financial and real assets that can be easily converted into currency.
B) are certain highly liquid financial assets that do not function directly as a medium of exchange but can be readily converted into M1.
C) are excluded from M2 because they are highly liquid.
D) are defined as monetary balances that are immediately available,at zero cost,for household and business transactions.

E) B) and D)
F) B) and C)

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Currency and coins held by banks are part of the M1 definition of money supply.

A) True
B) False

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Answer the question on the basis of the following table:  Year ‾ Price Level‾ Value of Dollar ‾11.00$1.0021.2530.8040.50\begin{array}{ccc}\underline{\text { Year }} &\underline{ \text { Price Level} } &\underline{ \text { Value of Dollar }} \\1& 1.00 & \$ 1.00 \\2 & 1.25 & \\3 & 0.80 & \\4& 0.50 &\end{array} Refer to the table.The value of the dollar in year 3 is:


A) $1.20.
B) $1.25.
C) $0.80.
D) $1.10.

E) B) and C)
F) A) and C)

Correct Answer

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(Consider This) Credit card balances are:


A) a component of M1.
B) a component of M2 but not of M1.
C) a component of M1 but not of M2.
D) not a component of M1 or M2.

E) A) and B)
F) C) and D)

Correct Answer

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Which one of the following is true about the U.S.Federal Reserve System?


A) There are 12 regional Federal Reserve Banks.
B) The head of the U.S.Treasury also chairs the Federal Reserve Board.
C) There are 14 members of the Federal Reserve Board.
D) The Open Market Committee is smaller in size than the Federal Reserve Board.

E) B) and C)
F) A) and D)

Correct Answer

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The difference between M1 and M2 is that:


A) the former includes time deposits.
B) the latter includes small-denominated time deposits,noncheckable savings accounts,money market deposit accounts,and money market mutual fund balances.
C) the latter includes negotiable government bonds.
D) the latter includes cash held by commercial banks and the U.S.Treasury.

E) B) and D)
F) B) and C)

Correct Answer

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Currency in circulation is part of:


A) M1 only.
B) M2 not including M1.
C) neither M1 nor M2.
D) both M1 and M2.

E) A) and C)
F) B) and C)

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What are "mortgage-backed securities"?


A) Company stock shares for financial institutions that lend to home buyers.
B) Bonds backed by mortgage payments.
C) Treasury bills and savings bonds that banks sold to maintain liquidity during the mortgage default crisis.
D) Insurance against mortgage loan defaults.

E) None of the above
F) B) and C)

Correct Answer

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Smith Barney,Charles Schwab,and Merrill Lynch are all primarily:


A) investment banks.
B) mutual fund companies.
C) insurance companies.
D) securities firms.

E) None of the above
F) B) and C)

Correct Answer

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Time deposits of $100,000 or more are:


A) a component of M1.
B) a component of M2 but not of M1.
C) a component of M1 but not of M2.
D) not a component of M1 or M2.

E) All of the above
F) B) and D)

Correct Answer

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Showing 61 - 80 of 134

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