The Story of Banks

1.

1 point

How many districts are in the Federal Reserve System?

10

11

15

12

2.

1 point

Money is a _________, an agreed-upon system for measuring the value of goods and services.

medium of exchange

money

financial intermediary

bank

3.

1 point

Banks lend money without any conditions.

True

False

4.

1 point

What is an overdraft?

Writing a check or checks for more than the total amount of money in the account.

Writing a check or checks for less than the total amount of money in the account.

Writing a check or checks for the same amount of money in the account.

5.

1 point

People who put money into banks

depositors

non-depositors

bankers

brokers

6.

1 point

Government banks that manage, regulate, and protect the money supply and the banks themselves

commercial banks

central banks

wholesale banks

retail banks

7.

1 point

Interest

how much we put in the bank.

money used to pay off debts.

what we call saving.

money paid for use of borrowed money.

8.

1 point

The technical name for a checking account is Demand Deposit Account (DDA).

True

False

9.

1 point

Thrift banks such as mutual savings banks, savings and loans, credit unions, developed to help individuals who are not served by commercial banks.

wholesales banks

retail banks

commercial banks

central banks

10.

1 point

Banks don’t really consider your credit report prior to lending you money.

True

False

11.

1 point

A secured loan is a loan backed only by the reputation and credit worthiness of the borrower.

True

False

12.

1 point

Financial institutions commonly thought of as banks.

commercial banks

wholesale banks

retail banks

thrift banks

13.

1 point

Savings, checking, and CD's are all types of financial accounts.

True

False

14.

1 point

The five C's of credit include capital, capacity, collateral, conditions and

certificates

character

collections

cost

15.

1 point

Credit unions only serve businesses.

True

False

16.

1 point

Banks and credit unions earn interest on your money by loaning it to others.

True

False

17.

1 point

A Negotiable Order of Withdrawal account (NOW) is not an interest bearing checking account.

True

False

18.

1 point

Interest is the price borrowers pay for using someone else’s money.

True

False

19.

1 point

Interest is the amount of money that you pay to borrow money or the amount of money that you earn on a deposit.

True

False

20.

1 point

Some banks and credit unions allow you to open an account with as little as $20.00.

True

False

21.

1 point

The basic money supply in the United States consists of paper currency, metallic currency, and checking account deposits.

True

False

22.

1 point

The FDIC insures each bank account up to

$250,000

$150,000

$100,000

$200,000

23.

1 point

Banks and credit unions typically offer which of the following types of accounts?

individual retirement accounts

all of the above

savings

certificates of deposit

24.

1 point

Anything the people generally accept as payment for goods and services.

deposits

money supply

money

barter

25.

1 point

Banks and credit unions lend money with a set of

accounts

risks

certificates

conditions

26.

1 point

Stored value card is another name for gift card.

True

False

27.

1 point

EFT stands for electronic funds transfer.

True

False

28.

1 point

Banks and credit unions pay more interest on savings accounts than they charge on loans.

True

False

29.

1 point

When choosing a bank, it is NOT important to
choose one backed by the FDIC.

True

False

30.

1 point

A deposit is putting money into your pocket.

True

False

31.

1 point

A bank is a ________ for the safeguarding, transferring, exchanging, or lending of money.

medium of exchange

financial merger

security function

financial intermediary

32.

1 point

Lenders and borrowers take a risk of losing their money.

True

False

33.

1 point

Interest that is earned on the principal and any interest that has been earned previously.

compound interest

simple interest

34.

1 point

What do customers use the EFT service for?

to withdraw money

to move money from one account to another

to deposit money

as energy-efficient fun time

35.

1 point

Depository institutions include commercial banks, savings and loans, credit unions, and insurance companies.

True

False

36.

1 point

Commercial banks that specialize only in business banking

thrift banks

wholesale banks

savings and loans

retail banks

37.

1 point

How do banks make money?

Charge higher rate of interest on loans than pay interest on deposits.

Charge higher interest rates on deposits than on loans.

By buying and selling goods.

Pay higher interest rates on deposits.

38.

1 point

A check is an order from you to the bank to transfer money from your account to someone else.

True

False

39.

1 point

Allows consumers to execute a variety of banking transactions with mobile phones.

on-line banking

computer banking

mobile banking

transaction banking

40.

1 point

Money does not earn interest in a piggy bank.

True

False