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Exam 20: Money,financial Institutions,and the Federal Reserve

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Question 41

Multiple Choice

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The ___________ represents one of the Fed's most powerful monetary policy tools.

A) reserve requirement
B) discount rate
C) margin requirement
D) working capital requirement

E) None of the above
F) A) and C)

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Question 42

True/False

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The World Bank primarily finances projects to improve the productivity and standard of living in less-developed nations.

A) True
B) False

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Question 43

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GO-tags,a new product introduced by First Data,Inc.sports a small chip with a radio-transmitter that permits the user to tap a small card against a machine and transfer funds from the card to the vendor's account.

On payday,employers can designate their banks to electronically transfer funds from the business' checking account to the employees' checking account.This represents an example of a(n) :

Thanks in part to the Federal Reserve System,few banks failed during the Great Depression.

Typically,banks impose a service charge for check-writing privileges or demand a minimum deposit.

Electronic fund transfer (EFT)tools include debit cards,smart cards,direct deposit,direct payments,and electronic check conversion.

The World Bank has received criticism because:

Yesterday it was reported that the U.S.is clearly experiencing an economic downturn.A strategy the Fed may enact if the nation is facing recession is to buy government securities in open-market operations.

Which of the following helps to provide for the smooth flow of money between nations?

Damian has played supporting roles in a number of movies and is also passionate about his craft to the point where he created a home theatre inside his house.He has a satellite dish where he receives an unlimited number of movies,and he also has an online account with Netflix™ and Blockbuster™.For added convenience,he has set-up direct payment to these companies.This means when his statement arrives each month,he will get online and tell his bank how much to pay these vendors.

Which of the following institutions primarily finances economic development projects in less-developed countries?

In an electronic funds transfer (EFT)system,the information of a transaction is communicated from one computer to another.

When Mr.Smith in Quince Orchard,MD uses a check to buy a tractor from Mr.Brown in Austin,TX,__________ different banks are involved in the transaction.

Smart cards can allow the user to access secure areas within buildings or buy gas with the swipe of the card.

The Federal Reserve System enabled the U.S.economy to avoid serious banking problems during the Great Depression.

Everything else held constant,an international bank based in New York would prefer to loan money to an efficient firm operating in San Paulo,Brazil than an inefficient firm operating in southern California.

__________ occurs when goods are traded directly for other goods.

Some financial services organizations lend money directly to corporations.

The Small Business Administration has reduced its guaranteed loan program.