Question 1

Federal deposit insurance has

Accepted Answer

A)   prevented bank depositor panics,but not bank failures.
B)   prevented bank panic and bank failures.
C)   prevented bank failures,but not bank depositor panic.
D)   not prevented bank depositor panics,but has eliminated bank failures.
E)   None of the above

Question 2

The deposits of federal credit unions are insured by the Federal Deposit Insurance Corporation.

Accepted Answer

A) True 
 B)False

Question 3

Fractional reserves mean that banks maintain less than 100 percent of customer deposits in liquid assets,or reserves.

Accepted Answer

A) True 
 B)False

Question 4

The original purpose of deposit insurance was to

Accepted Answer

A)   prevent bank runs by large depositors.
B)   increase the regulatory monitoring of banks.
C)   force the banks to invest in less risky investments.
D)   prevent bank panics by insuring the small deposits of many people.
E)   All of the above.

Question 5

With 100 percent reserve banking,little or no lending is possible.

Accepted Answer

A) True 
 B)False

Question 6

The primary tools of the Federal Reserve monetary policy include all of the following except

Accepted Answer

A)   changing the discount rates.
B)   open market operations.
C)   changes in reserve requirements.
D)   changes in the Federal Funds rate.
E)   All of the above are monetary policy tools used by the Fed.

Question 7

The Fed banks are supervised by a central governing body called

Accepted Answer

A)   the Board of Governors
B)   the Federal Open Market Committee
C)   the Chairman of the Fed
D)   the Federal Banking Committee

Question 8

The Federal Reserve's most influential policy is its reserve requirement policy.

Accepted Answer

A) True 
 B)False

Question 9

A(n) ____ is a depository institution that is owned by its depositors,who are members of a common organization or association,such as an occupation,a religious group,or a community.

Accepted Answer

A)   pension fund
B)   commercial bank
C)   credit union
D)   insurance company
E)   mutual fund

Question 10

A decrease in reserve requirements should result in an increase in the total level of member bank reserves.

Accepted Answer

A) True 
 B)False

Question 11

The most frequent common bond for credit union formation is

Accepted Answer

A)   occupational.
B)   church-related or religious affiliation.
C)   geographical.
D)   ethnicity factors.
E)   political affiliation.

Question 12

The Federal Deposit Insurance Corporation (FDIC)approves and charters all federal,or national,banks and many state banks.

Accepted Answer

A) True 
 B)False

Question 13

U.S.banks have been permitted to engage in a wider range of business activities in foreign countries than at home in order to be competitive with foreign banks.

Accepted Answer

A) True 
 B)False

Question 14

A mutual fund that invests primarily in short-term,low risk securities like commercial paper and Treasury bills are called ____ mutual funds.

Accepted Answer

A)   value
B)   growth
C)   money market
D)   indexed

Question 15

Historically,credit unions were

Accepted Answer

A)   organized during World War I to provide savings institutions to service personnel overseas.
B)   organized with humanitarian goals.
C)   founded to provide consumers with low-cost loans and encourage thrift for members.
D)   first organized in the United States.
E)   All of the above.

Question 16

The primary responsibility of the Federal Open Market Committee (FOMC) is to

Accepted Answer

A)   establish a level and growth of the money supply through open market operations to produce a stable economic environment.
B)   supervise the examination of state member banks.
C)   change the reserve requirements of banks.
D)   determine the level of Federal Reserve notes allowed in circulation.
E)   None of the above.

Question 17

Life insurance protects

Accepted Answer

A)   the insured from premature death.
B)   the beneficiaries of the insured from the economic consequences of death.
C)   beneficiaries from premature death.
D)   the insured from fatal risks faced by the insured.
E)   None of the above.

Question 18

Financial intermediaries generally take deposits from many savers and loan all their funds to a single firm.

Accepted Answer

A) True 
 B)False

Exam 4: Financial Intermediaries and the Banking System

The Fed banks are supervised by a central governing body called

Correct Answer
verified

A(n) ____ is a depository institution that is owned by its depositors,who are members of a common organization or association,such as an occupation,a religious group,or a community.

Correct Answer
verified

The Federal Reserve's most influential policy is its reserve requirement policy.

Correct Answer
verified

The most frequent common bond for credit union formation is

Correct Answer
verified

With 100 percent reserve banking,little or no lending is possible.

Correct Answer
verified

Federal deposit insurance has

Correct Answer
verified

Historically,credit unions were

Correct Answer
verified

The original purpose of deposit insurance was to

Correct Answer
verified

Life insurance protects

Correct Answer
verified

The Federal Deposit Insurance Corporation (FDIC)approves and charters all federal,or national,banks and many state banks.

Correct Answer
verified

A decrease in reserve requirements should result in an increase in the total level of member bank reserves.

Correct Answer
verified

Financial intermediaries generally take deposits from many savers and loan all their funds to a single firm.

Correct Answer
verified

A mutual fund that invests primarily in short-term,low risk securities like commercial paper and Treasury bills are called ____ mutual funds.

Correct Answer
verified

The deposits of federal credit unions are insured by the Federal Deposit Insurance Corporation.

Correct Answer
verified

Fractional reserves mean that banks maintain less than 100 percent of customer deposits in liquid assets,or reserves.

Correct Answer
verified

The primary tools of the Federal Reserve monetary policy include all of the following except

Correct Answer
verified

The primary responsibility of the Federal Open Market Committee (FOMC) is to

Correct Answer
verified

U.S.banks have been permitted to engage in a wider range of business activities in foreign countries than at home in order to be competitive with foreign banks.

Correct Answer
verified

Exam 4: Financial Intermediaries and the Banking System

The Fed banks are supervised by a central governing body called

Correct AnswerverifiedShow Answer

A(n) ____ is a depository institution that is owned by its depositors,who are members of a common organization or association,such as an occupation,a religious group,or a community.

Correct AnswerverifiedShow Answer

The Federal Reserve's most influential policy is its reserve requirement policy.

Correct AnswerverifiedShow Answer

The most frequent common bond for credit union formation is

Correct AnswerverifiedShow Answer

With 100 percent reserve banking,little or no lending is possible.

Correct AnswerverifiedShow Answer

Federal deposit insurance has

Correct AnswerverifiedShow Answer

Historically,credit unions were

Correct AnswerverifiedShow Answer

The original purpose of deposit insurance was to

Correct AnswerverifiedShow Answer

Life insurance protects

Correct AnswerverifiedShow Answer

The Federal Deposit Insurance Corporation (FDIC)approves and charters all federal,or national,banks and many state banks.

Correct AnswerverifiedShow Answer

A decrease in reserve requirements should result in an increase in the total level of member bank reserves.

Correct AnswerverifiedShow Answer

Financial intermediaries generally take deposits from many savers and loan all their funds to a single firm.

Correct AnswerverifiedShow Answer

A mutual fund that invests primarily in short-term,low risk securities like commercial paper and Treasury bills are called ____ mutual funds.

Correct AnswerverifiedShow Answer

The deposits of federal credit unions are insured by the Federal Deposit Insurance Corporation.

Correct AnswerverifiedShow Answer

Fractional reserves mean that banks maintain less than 100 percent of customer deposits in liquid assets,or reserves.

Correct AnswerverifiedShow Answer

The primary tools of the Federal Reserve monetary policy include all of the following except

Correct AnswerverifiedShow Answer

The primary responsibility of the Federal Open Market Committee (FOMC) is to

Correct AnswerverifiedShow Answer

U.S.banks have been permitted to engage in a wider range of business activities in foreign countries than at home in order to be competitive with foreign banks.

Correct AnswerverifiedShow Answer

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