Exam 15: Money and Banking

A) Competitors of Domino Grace have lured new customers by offering access to exotic new investment options.
B) A new political administration is expected to pass new financial regulations affecting derivative investments.
C) Derivative investments are similar to most investments in that when a trade is made a gain on one side is mirrored by a loss on the other.
D) Many of the investors who are interested in derivative investments are also interested in traditional investments.
E) The opinions of Domino Grace stockholders are representative of the opinions of the investment community in general.

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A) how much currency is in circulation
B) how many units the currency can be divided into
C) how portable the form of currency is
D) how durable the form of currency is
E) how much currency has been saved

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A) the Check Clearing for the 21st Century Act
B) the USA Patriot Act
C) the Bank Secrecy Act
D) the Federal Reserve Act
E) the Emergency Economic Stabilization Act

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A) It neither dies nor spoils and if it wears out, it can be replaced.
B) Units of money can be matched with the value of goods.
C) It can be exchanged across national borders.
D) It allows people to measure the relative value of goods and services.
E) It is light and easy to handle.

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Given the two main tools for controlling...

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A) the U.S. State Department
B) the International Monetary Fund
C) the World Bank
D) commercial banks
E) the Internet

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A) An increase in the discount rate will lower the overall values of loans from the Federal Reserve Banks to individual banks.
B) An increase in the discount rate will lower the overall values of loans from individual banks to other financial institutions.
C) An increase in the discount rate will lower the overall number of banks issuing loans to individuals.
D) An increase in the discount rate will lower the overall number of loans from the Federal Reserve Banks to individual banks.
E) An increase in the discount rate will lower the overall number of loans from the Federal Reserve Banks to individuals.

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A) They are backed by the U.S. government.
B) They have a guaranteed rate of return.
C) They are easily sold.
D) They are readily available for purchase.
E) They earn a great profit on the international money market.

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Insurance companies collect premium paym...

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The Federal Deposit Insurance Corporatio...

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A) the development of new financial opportunities for banks
B) the minting of new money to disperse into the money market
C) the control of interest rates among banks
D) the maintenance of a well-functioning lending system among banks
E) the buying and selling of securities

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A) The FDIC can seize the assets of the bank and its investors and settle the bank's debts.
B) The FDIC can allow the bank to stay afloat by granting a loan of federal money.
C) The FDIC can conduct an inquiry into the investors' assets and actions to determine if there was any malfeasance that caused the bank failure.
D) The FDIC can allow another bank to take responsibility for the failed bank's liabilities through sale of the failed bank.
E) The FDIC can settle the bank's debts through its insurance deposit fund and regulate the bank's transactions more strictly.

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A) The resulting improvements will help stabilize the political situation, and hence the international trade, of certain developing countries.
B) The resulting improvements will help increase the productive capacity, and hence the international trade, of certain developing countries.
C) The resulting improvements will help increase the population morale, and hence the international trade, of certain developing countries.
D) The resulting improvements will help increase the overall quality of life, and hence the international trade, of certain developing countries.
E) The resulting improvements will help increase the value of the currency, and hence the international trade, of certain developing countries.

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A) A new deposit account will make more funds available to pay the interest on other deposit accounts.
B) A new deposit account will make more funds available to pay the bank's employees.
C) A new deposit account will make more funds available to give out in loans.
D) A new deposit account will make more funds available to give out in dividends to its investors.
E) A new deposit account will make more funds available to facilitate brokerage transactions.

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