978-1259723223 Test Bank TBChap034 Part 3

subject Type Homework Help
subject Pages 14
subject Words 5718
subject Authors Campbell McConnell, Sean Flynn, Stanley Brue

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100. Between September 2007 and September 2009,
101. New York Life, Prudential, and Hartford are all primarily
102. Wells Fargo, J.P. Morgan Chase, and Citibank are all primarily
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34-42
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Difficulty: 01 Easy
Learning Objective: 34-08 Identify the main subsets of the financial services industry in
the United States and provide examples of some firms in each category.
Test Bank: I
Topic: The Postcrisis U.S. Financial Services Industry
103. Charter One, Pentagon Federal Credit Union, and Boeing Employees Credit Union are all
primarily
104. TIAA-CREF, Teamsters' Union, and CalPERS are all primarily
105. TD Ameritrade, Charles Schwab, and Merrill Lynch are all primarily
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34-43
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D. securities firms.
106. In 2009, approximately how much of the money on deposit was held by the three largest
U.S. banks?
107. Firms whose central business is to offer security advice and buy and sell individual stocks
and bonds for clients are known as
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108. Firms whose central business is providing individual account shares of a group of stocks,
bonds, or both are known as
109. Which of these pairs of financial institutions are most alike in terms of their main lines of
business?
110. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 in
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34-45
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 34-08 Identify the main subsets of the financial services industry in
the United States and provide examples of some firms in each category.
Test Bank: I
Topic: The Postcrisis U.S. Financial Services Industry
111. (Consider This) Credit cards are
112. (Consider This) Which of the following is not part of the M2 money supply?
113. (Consider This) Credit card balances are
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34-46
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 34-02 List and describe the components of the U.S. money supply.
Test Bank: I
Topic: The Components of the Money Supply
114. (Last Word) During the financial crisis of 20072008, the Federal Reserve
115. (Last Word) During the financial crisis of 20072008,
116. (Last Word) Solvent firms face the threat of bankruptcy during a financial crisis
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34-47
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
firms.
B. because the value of their assets is less than the value of their debts.
C. when many assets are illiquid, making it difficult to make timely payments on debt.
D. because the Federal Reserve extends loans to these firms at high rates of interest.
117. (Last Word) The Federal Reserve policy of "extend and pretend"
118. (Last Word) Which of the following best describes the policy of "extend and pretend"?
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34-48
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Difficulty: 02 Medium
Learning Objective: 34-07 Discuss the actions of the U.S. Treasury and the Federal
Reserve that helped keep the banking and financial crisis of 2007-2008 from worsening.
Test Bank: I
To pic: The Policy Response to the Financial Crisis
True / False Questions
119. The M2 money supply is larger than the M1 money supply.
120. The M2 money supply may be larger or smaller than the M1 money supply, depending on
the size of small-denominated time deposit balances and money market mutual fund balances
held by individuals.
121. Checkable deposits held in savings and loan institutions, mutual savings banks, and credit
unions are part of the M1 definition of the money supply.
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34-49
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 34-02 List and describe the components of the U.S. money supply.
Test Bank: I
To pic: The Components of the Money Supply
122. Currency and coins held by banks are part of the M1 definition of money supply.
123. Gold backs the U.S. money supply.
124. The 12 Federal Reserve Banks are governmentally owned but privately controlled.
125. The U.S. Treasury is the only agency authorized to put money into circulation in the U.S.
economy.
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126. Thrifts are known as "banker's banks" because they lend money to commercial banks.
127. As of March 2009, the federal government and the Federal Reserve had spent $170 billion
to keep AIG financially afloat.
128. Subprime mortgage loans are so named because the rates charged are below the prime
interest rate.
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34-51
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 34-06 Identify and explain the main factors that contributed to the
financial crisis of 2007-2008.
Test Bank: I
To pic: The Financial Crisis of 2007 and 2008
129. The programs enacted to bail out the financial system from crisis in 2007 and 2008 helped
alleviate the moral hazard problem in the financial industry.
130. As part of its response to the financial crisis of 2007 and 2008, Federal Reserve Banks
began paying interest on reserve deposits.
131. Fidelity, Putnam, Janus, and Vanguard are examples of mutual fund companies.
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34-52
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Difficulty: 01 Easy
Learning Objective: 34-08 Identify the main subsets of the financial services industry in
the United States and provide examples of some firms in each category.
Test Bank: I
To pic: The Postcrisis U.S. Financial Services Industry
132. Laws passed in the late 1990s restricted the activities of financial firms to narrowly
defined services they could provide, prompting the financial crisis of 2007 and 2008.
133. (Consider This) Credit cards are defined as money because they facilitate transactions.
Multiple Choice Questions
134. The functions of money are to serve as a
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34-53
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 34-01 Identify and explain the functions of money.
Test Bank: II
Topic: The Functions of Money
135. When a consumer wants to compare the price of one product with another, money is
primarily functioning as a
136. When a banker records how many dollars each of his borrowers owes the bank, money is
serving as
137. What function is money serving when you deposit money in a savings account?
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34-54
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 34-01 Identify and explain the functions of money.
Test Bank: II
Topic: The Functions of Money
138. What function is money serving when you use it when you go shopping?
139. Which of the following functions of money enables society to gain the benefits of
geographic and labor specialization?
140. If product prices were stated in terms of marbles, then marbles would be functioning
primarily as
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D. a unit of account.
141. Money functions as a store of value if it allows you to
142. One major advantage of money serving as a medium of exchange is that it allows society
to
143. Money eliminates the need for a coincidence of wants in trading primarily through its role
as a
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A. unit of account.
B. medium of exchange.
C. store of value.
D. medium of deferred payment.
144. An asset's liquidity refers to its ability to be
145. Which one of the following is considered to be a "stock" rather than a "flow" variable?
146. The M1 money supply is composed of
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147. The currency, or money, of the United States, like those of other countries, is
148. The paper money, or currency, in the United States essentially represents
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149. Checkable deposits are
150. Currency and checkable deposits are
151. The paper currencies of the United States are also called
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152. As of February 2016, more than half of the money supply (M1) was in the form of
153. Which of the following institutions does not provide checkable-deposit services to the
general public?
154. Which definition(s) of the money supply include(s) only items that are directly and
immediately usable as a medium of exchange?
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 34-02 List and describe the components of the U.S. money supply.
Test Bank: II
Topic: The Components of the Money Supply
155. Money supply M1 does not include the currency held by
156. Which of the following is included as part of the M1 money supply?
157. Joe deposits $200 in currency into his checking account at a bank. This deposit is treated
as

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