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Investment companies, such as Goldman Sachs and GE Capital, offer many services similar to commercial banks, but yet they do not receive deposits from members. These are called
nonbanks
The securities that were created by financial institutions that consisted of all different kinds of mortgages bundled together to diversify risk are known as
In order to prevent a total collapse of banks around the United States and the world, the federal government passed
TARP
If a borrower receives a loan with a variable interest rate, then the interest rate on the loan
may go up or down
The set of actions the Federal Reserve uses in order to manage the economy is known as
monetary policy
What organization has the most power over the currency in the United States.
Federal Reserve
In some countries, people have paid their energy bills with items like milk or sausage. This practice is referred to as
bartering
The money _________________ is the amount of money the Federal Reserve makes available for people to buy goods and services. (one blank/one word)
supply
The money supply term that refers to money that can be accessed quickly and easily is
M1
The saying "too much money chasing too few goods," is used to refer to:
inflation
The money supply is
the annual total sales of goods and services sold in the United States
the amount of money the Federal Reserve makes available for people to buy goods and services
the total cash in private hands in the United States
the annual amount of money printed by the U.S. Treasury
the amount of money the Federal Reserve makes available for people to buy goods and services
failing dollar means
amt of goods and services you can buy with a dollar in global market decreases
M-1 includes:
coins, paper bills, checks
What are three major duties of the Federal Reserve?
Multiple select question.
buying and selling government securities
collecting data on money policy
setting reserve requirements
making loans to foreign governments
buying and selling government securities
collecting data on money policy
setting reserve requirements
The money supply term that includes accounts that can be accessed quickly and easily and most savings accounts, mutual funds, and Certificates of Deposit is
M2
The percentage of commercial banks' checking and savings accounts that must be kept in the bank is referred to as
the reserve requirement
The M-3 (money supply) includes
m2 and institutional money market funds
When the Federal Reserve buys and sells government bonds it is
engaging in open market operations
The amount of goods and services you can buy with a dollar in the global market Blank______.
Multiple choice question.
increases with a rising dollar value
increases with a falling dollar value
is not affected by the value of a dollar
increases during a period of inflation
increases with a rising dollar value
The methods the Federal Reserve uses to manage the economy include all except:
Multiple choice question.
controlling reserve requirements
changing the discount rate
controlling the federal budget
controlling open-market operations
controlling the federal budget
The Federal Reserve banks provide the Blank______ function for checks written across states.
Multiple choice question.
check-clearing
depository
collection center
savings account
check-clearing
Setting the reserve requirement, setting the discount rate, and collection data on the money supply are all activities of
The Federal Reserve
Select all that apply
Which four institutions are members of the U.S. banking system?
Multiple select question.
financial investment firms
Internet trading firms
credit unions
commercial banks
nonbanks that offer financial services
savings and loans
credit unions
commercial banks
nonbanks that offer financial services
savings and loans
The check clearing role of the Federal Reserve allows Blank______.
Multiple choice question.
investment bankers to offer IPOs
banks to settle the check payments between banks in different parts of the country
member banks to offer free checking for better customers
member banks to create loans using checking accounts as collateral
banks to settle the check payments between banks in different parts of the country
A _______________________ bank is a profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans.
commercial
Select all that apply
What were the effects of the lack of a banking system in early America?
Multiple select question.
Great Britain established local banks in America.
Land banks were created.
Local governments often would issue currency.
The barter system was commonplace.
Land banks were created.
Local governments often would issue currency.
The barter system was commonplace.
What is the technical name for a checking account; the money in a demand deposit can be withdrawn anytime on demand from the depositor.
demand deposit
The cash shortage problems and failure of banks in 1907 led to ______.
Multiple choice question.
the creation of the Treasury Department
a networked system of land banks
the creation of the Federal Reserve System
the elimination of any form of central bank
the creation of the Federal Reserve System
Generally speaking, commercial banks grant loans based on Blank______.
Multiple choice question.
the interest a borrower is willing to pay
a borrower's creditworthiness
the length of time the borrower has been employed
the time needed by the borrower to repay the loan
a borrower's creditworthiness
A major problem during the Great Depression created by a weak banking system was Blank______.
Multiple choice question.
the stock market crash of 1929
very high inflation
the shortage of capital goods
a run on and closure of many banks
a run on and closure of many banks
Commercial banks, savings and loans, credit unions, and non-banks are all considered to be a part of the U.S. __________________ system
banking
S&Ls were originally set up to Blank______.
Multiple choice question.
fund operations for the federal government
encourage purchase of automobiles
promote home ownership
help pay for college
promote home ownership
A financial institution that accepts both savings and checking deposits and provides home mortgage loans.
Saving and loan association (S&L)
Select all that apply
Which statements about commercial banks are true?
Multiple select question.
Commercial banks do not seek to earn a profit.
Commercial banks make loans from the deposits of its customers.
Commercial banks are equally responsible to their depositors and borrowers.
Commercial banks are owned and controlled by its depositors.
Commercial banks make loans from the deposits of its customers.
Commercial banks are equally responsible to their depositors and borrowers.
Select all that apply
Which of the following are services provided by nonbanks?
Multiple select question.
financial services
brokerage services
sell insurance
accept deposits
financial services
brokerage services
sell insurance
Often called "thrifts," this financial institution primarily offers checking and savings accounts and makes long-term loans for residential mortgages.
Multiple choice question.
credit union
savings and loan association
commercial finance company
commercial bank
savings and loan association
What are monies put aside by corporations and others for the retirement of their employees called?
Multiple choice question.
flexible benefits
cafeteria benefits
long-term funds
pension funds
pension funds
A nonprofit, member-owned financial cooperative that offers the full variety of banking services to their members is called a Blank______.
Multiple choice question.
commercial bank
brokerage firm
savings and loan organization
credit union
credit union
A demand deposit (checking account) is known as that because Blank______.
Multiple choice question.
the Federal Reserve can demand a certain level of these accounts
it is the only account regulated by the Federal Reserve
funds may be withdrawn at any time by its owner
depositors can demand a certain rate of interest
funds may be withdrawn at any time by its owner
The difference between banks and similar nonbank entities is that Blank______.
Multiple choice question.
nonbank entities must be chartered in the state in which they operate
nonbank entities do not pay taxes
nonbanks cannot accept deposits
banks do not pay taxes
What was Congress’s most important legislation to strengthen the banking system as a result of bank failures that were occurring in the 1930s due to the effects of the Great Depression?
Multiple Choice
laws which prevented banks from failing
the Federal Reserve System
federal deposit insurance
nonbanks
Why has the World Bank faced considerable criticism and protests around the world?
Multiple Choice
It lends too much money to developing nations with no expectations of repayment.
It provides low-cost AIDS drugs only to developing nations.
It supports countries that restrict religious freedoms and tolerate sweatshops.
It finances too many green projects.
It supports countries that restrict religious freedoms and tolerate sweatshops.
How has war and terrorism impacted economy (2)
drained money from econ
increased risk for businesses
Some of the world's largest firms that believe in climate change are:
Multiple select question.
General Electric, Shell, and Coca-Cola
British Airways, DuPont, and Shanghai Electric
Johnson and Johnson and Nestle
Exxon/Mobil, Halliburton, and Iraqi Oil
General Electric, Shell, and Coca-Cola
British Airways, DuPont, and Shanghai Electric
Johnson and Johnson and Nestle
The goal of business leaders is to try to recognize and respond to the needs of ___________________ and still make profit
stakeholders
What are the five factors of production?
land, labor, capital, entrepreneurship, knowledge; most important are entrepreneurship and knowledge
What makes countries rich today?
combination of entrepreneurship and usage of knowledge
Note
Flashcard