Question 1

The central bank of the United States of America is commonly known as the Fed.

Accepted Answer

The Federal Reserve System, commonly referred to as the Fed, is the central bank of the United States of America.

Question 2

The "Fed" is the nickname for

Accepted Answer

The "Fed" is a commonly used nickname for the Federal Reserve System, which is the central banking system of the United States. It is responsible for regulating monetary policy and the nation's money supply.

Question 3

The chairman of the Board of Governors of the Federal Reserve since 2006 is

Accepted Answer

Ben Bernanke has been the Chairman of the Board of Governors of the Federal Reserve since 2006.

Question 4

The Federal Reserve

Accepted Answer

The Federal Reserve acts as a "bank for banks," providing various services such as loans and account management to other commercial banks.

Question 5

Financial intermediaries exist primarily because

Accepted Answer

Financial intermediaries exist primarily to make a profit by connecting lenders and borrowers and earning a spread on the interest rates charged. While historical factors may have contributed to their development and some intermediaries may be subject to federal mandates, these are not the primary reasons for their existence. They are not part of the U.S. Treasury or the Federal Reserve System.

Question 6

Although there has been a reported increase in counterfeit money,it is estimated to currently account for

Accepted Answer

According to reports by the Federal Reserve, the amount of counterfeit money in circulation is estimated to be less than 1 percent of genuine currency.

Question 7

The chair of the Board of Governors of the Federal Reserve is

Accepted Answer

The chair of the Board of Governors of the Federal Reserve is appointed by the president and confirmed by the Senate. The appointment can be renewed for additional terms, typically lasting four years each.

Question 8

The Board of Governors of the Federal Reserve is

Accepted Answer

The Board of Governors of the Federal Reserve is appointed by the president and confirmed by the Senate, with each governor serving a 14-year term. This structure is designed to ensure the board's independence from political pressure.

Question 9

Items in M1 are more liquid than items in M2.

Accepted Answer

M1 includes currency, demand deposits, and other highly liquid assets that can be easily converted into cash, while M2 includes less liquid assets such as savings accounts and time deposits.

Question 10

One of the main reasons the U.S.Treasury is redesigning dollar bills (such as the $10,$20,and $50 denominated bills)is so that they are more difficult to counterfeit.

Accepted Answer

The redesign of dollar bills by the U.S. Treasury is aimed at making them more difficult to counterfeit.

Question 11

The Federal Reserve System is divided into how many districts?

Accepted Answer

The Federal Reserve System is divided into 12 districts which each have a Federal Reserve Bank.

Question 12

Banks are referred to as intermediaries because they

Accepted Answer

Banks act as intermediaries between depositors and borrowers, channeling funds from savers to investors. They take in deposits (from individuals, businesses, and other organizations) and then use that money to make loans to other customers. In this way, they facilitate the flow of funds between savers and borrowers.

Question 13

Which of the following is true?

Accepted Answer

This is true in most cases as banks make a profit by charging a higher interest rate on loans than they pay on savings accounts. This is known as the spread or the margin.

Question 14

A commercial bank is

Accepted Answer

A commercial bank is a financial intermediary that accepts deposits from individuals and businesses and uses those funds to make loans and investments. It is not a Federal Reserve bank, part of the federal government, part of the U.S. Treasury, or a nonprofit organization.

Question 15

Time deposits require the depositor to keep the money at the bank for a certain amount of time or else lose interest.They are therefore not as liquid as checking deposits,but it is normally possible to withdraw funds from them.

Accepted Answer

This is a correct statement about time deposits.

Question 16

The money supply is the sum of the currency in circulation.

Accepted Answer

The money supply is not just limited to currency in circulation. It also includes demand deposits, savings deposits, and other various types of financial instruments.

Question 17

Is money the same as income? Explain.

Accepted Answer

The answer of Is money the same as income? Explain....

Question 18

For a bank to make a profit,the interest rate on its deposit liabilities must be higher than the interest rate on its loan receipts.

Accepted Answer

Banks typically make a profit by lending at interest rates that are higher than the interest rates they offer on deposits. This difference is known as the interest rate spread.

Question 19

The central bank of the United States is known as the

Accepted Answer

The Fed is the commonly used nickname for the Federal Reserve System, which is the central banking system of the United States. The other answer choices are all incorrect. The Bundesbank is the central bank of Germany, Bank of America is a commercial bank, and First National Bank is a generic name used by many banks. The Department of the Treasury is not a central bank, but it does play a role in fiscal policy and government financing.

Question 20

If a country's currency is on a gold standard,does that mean there can be no inflation? Explain.

Accepted Answer

The answer of If a country's currency is on a...

Quiz 22: Money and Inflation