Macroeconomics Quiz # 6

In which sheet the financial record that indicates the balance between a bank’s assets and its liabilities plus capital ?

Balance

Financial

Main

Extra

Barter is ____ exchange of goods and services without the use of money

Direct

Indirect

Main

Positive

Commercial banks are financial institutions organized to handle everyday financial transactions of businesses and households through demand deposit accounts and savings accounts and by making short-term commercial and consumer loans.

True

False

Credit unions are financial cooperatives made up of depositors with a common affiliation

True

False

Coins and/or paper created to facilitate the trade of goods and services and the payment of debts is called

Accuracy

Currency

Precision

All of these

Balances in bank accounts that depositors can access on demand is called

Full deposits

Demand deposits

Extra demands

None of these

Interest rate that the Fed charges commercial banks for the loans it extends to them is known as

Positive rate

Discount rate

Sale rate

All of these

____ reserve levels held above that required by the Fed

Access

Excess

Less

Zero

Federal funds market in which banks provide short-term loans to other banks that need cash to meet reserve requirements

True

False

A means of exchange established by government declaration is known as

Full Money

Black money

Fiat money

Standard money

In which reserve system that requires banks to hold reserves equal to some fraction of their checkable deposits

Fractional

Additional

Multiple

Single

Gold standard is defining the dollar as equivalent to a set value of a quantity of gold, allowing direct convertibility from currency to gold

True

False

Gresham's law principle that “cheap money drives out dear money”; given an alternative, people prefer to spend less valuable money

True

False

Coins and paper officially declared to be acceptable for the settlement of financial debts is called

Legal order

Legal batch

Legal tender

All of these

The ease with which one asset can be converted into another asset or into goods and services is known as

Fluidity

Liquidity

Mobility

None of these

The narrowest definition of money; includes coins, currency, demand deposits, other checkable deposits, and traveler’s checks is called

M1

M2

M3

M4

A broader definition of money that includes M1 plus savings deposits, time deposits, and noninstitutional money market mutual fund shares is called

M1

M2

M3

M4

The attribute of money that makes it easier to borrow and to repay loans is called means of deferred payment

True

False

Medium of exchange is the primary function of money, which is to facilitate transactions and ____ transaction costs

Higher

Lower

Greater

Zero

Anything generally accepted in exchange for goods or services is called

Loan

Money

Deposit

Market

Money market mutual funds is interest-earning accounts provided by brokers that pool funds into such investments as ____ bills

Good

Treasury

Deposit

Transactions

A measure of the potential amount of money that the banking system generates with each dollar of reserves is money multiplier

True

False

Nontransaction deposits that are not money but can be quickly converted into money is called

Far money

Near money

Black money

All of these

Funds that cannot be used for payment directly but must be converted into currency for general use are non transaction deposits

True

False

Purchase and sale of U.S. government bonds by the Federal Reserve System is ___ market operations

Close

Open

Main

Large

Required reserve ratio is percentage of ____ that a bank must hold at the Federal Reserve Bank or in bank vaults

Transactions

Deposits

Money

All of these

Holdings of assets at the bank or at the Federal Reserve Bank as mandated by the Fed is known as

Preserve requirements

Reserve requirements

Essential requirements

Basic requirements

Serving and loan associations are financial institutions organized as cooperative associations that hold demand deposits and savings of members in the form of dividend- bearing shares and make loans, especially home mortgage loans

True

False

Highly liquid, interest-paying assets held by the bank is called

Primary reserves

Secondary reserves

Essential reserves

Basic reserves

In which deposits that can be easily converted to currency or used to buy goods and services directly ?

Admitted

Transaction

Delivered

None of these