QUESTION Currency represents roughly 3/4 of all media of exchange in the United States. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Currency represents only about 1/3 of all media of exchange in the United States.
Date: September 3rd, 2020
QUESTION Although the Federal Reserve is the central bank of the United States, it does not control the U.S. money supply. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The Federal Reserve is the central bank of the United States and it DOES control the U.S. money supply.
Date: September 3rd, 2020
QUESTION The only government organization that offers financial protection for money in banks, savings and loans, and credit unions is the FDIC. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Three different government organizations, the FDIC, SAIF, and NCUA, offer financial protection for money in banks, savings and loans, and […]
Date: September 3rd, 2020
QUESTION All commercial banks are chartered. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: All commercial banks are chartered, meaning they have received government permission to operate.
Date: September 3rd, 2020
QUESTION The Federal Reserve helps get money to commercial banks by making currency available and by making loans available. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The Federal Reserve helps get money to commercial banks by making currency available and by making loans available.
Date: September 3rd, 2020
QUESTION When the Fed raises the discount rate, banks are more motivated to borrow from it. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: When the Fed raises the discount rate, banks are less motivated to borrow from it.
Date: September 3rd, 2020
QUESTION Insurance companies typically invest any excess funds in stocks, real estate, and other assets. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Because many insurance companies collect more in premiums than they pay out in insured claims or operating expenses, they typically invest any excess funds in stocks, real […]
Date: September 3rd, 2020
QUESTION Pension funds tend to invest in short-term aggressive assets. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Pension funds tend to invest in long-term conservative assets such as common stock or government securities.
Date: September 3rd, 2020
QUESTION Bank deposit insurance and other policies were adopted to protect depositors as a result of the many banking troubles leading up to the Great Depression. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The many banking troubles leading up to the Great Depression did result in the creation of […]
Date: September 3rd, 2020
QUESTION Because of FDIC insurance, a depositor’s $1,000,000 would be safe if he or she were to have it evenly deposited among four banks. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Because the SAIF, via the SDIC, insures up to $250,000 per depositor per bank, $1,000,000 divided up evenly […]
Date: September 3rd, 2020
