Econ 102 - Principles of Macroeconomics » Spring 2023 » Money and Banking Quiz

Need help with your exam preparation?

Existing Quiz Clients Login here
Question #1
Banks try to keep their level of excess reserves low because
A.   bank regulators levy fines according to the number of excess reserves outstanding.
B.   the Fed charges a penalty for holdings of excess reserves.
C.   they are concerned that the money multiplier will become too large.
D.   they wish to maximize profits by making as many loans as possible.
Question #2
Which of the following is not a major problem with some commodity monies?
A.   To be useful, money must be storable and durable.
B.   To be useful, money must be of uniform quality.
C.   To be useful, money must be indivisible.
D.   To be useful, money must be easily handled.
Question #3
Currently in the U.S., money is backed by
A.   gold in Ft. Knox.
B.   silver in government vaults.
C.   willingness to accept it as payment.
D.   Federal Reserve notes in banks.
Question #4
Money is an imperfect store of value when
A.   gold can be purchased at bargain prices.
B.   banks are failing at an abnormally high rate.
C.   the unemployment rate is high.
D.   the rate of inflation is very high.
Question #5
The FDIC
A.   all of these
B.   insures most bank deposits for up to $250,000.
C.   eliminates the motive for customers to rush to their bank just because they heard bad news about the bank's finances.
D.   has been credited with the pronounced decline in bank failures after 1933, when the FDIC was established.
Question #6
One intention of deposit insurance is to reduce the danger of
A.   excess lending.
B.   risky lending.
C.   bank runs.
D.   All of these are correct.
Question #7
Which of the following is most liquid?
A.   checking accounts
B.   savings bonds
C.   cash
D.   savings accounts
Question #8
The primary benefit of a monetary system of exchange compared to a barter system is the increased
A.   ability to record transactions.
B.   time devoted to shopping
C.   time necessary to find trading partners
D.   efficiency in arranging transactions
Question #9
The government banking regulation that places an upper limit on the money supply is
A.   limitations on the types of assets that a bank may own.
B.   reserve requirements on bank deposits.
C.   periodic bank examinations and audits.
D.   deposit insurance by the FDIC.

Need help with your exam preparation?

Existing Quiz Clients Login here