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

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Question 61

True/False

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High startup costs cause Internet banks to have higher operating costs than traditional banks.

A) True
B) False

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Question 62

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Pension funds invest monies contributed by employers and/or employees for the benefit of their members' retirement.

A) True
B) False

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Question 63

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One thing is for certain,the average borrower's risk-averse behavior did not contribute to the problems that spiraled out of control and caused the recent banking crisis.

Many employers offer direct deposit,as a convenient and cost savings method of distributing employee pay each month.

The Fed Chairman is in control of:

________ involves the Fed buying and selling U.S.government securities to increase or decrease the money supply.

Barter is the trading of goods and services for other goods and services.

How did the Fed contribute to the recent banking crisis?

There is much speculation that prior to the recent banking crisis,the Fed (Federal Reserve System)and the SEC (Securities and Exchange Commission)were not enforcing the regulations they were charged to enforce.

________ persuaded Congress to establish the first central bank in the United States.

Banks help businesses operate in other countries by exchanging the currency of one nation for the currency of another.

As nonprofit institutions,credit unions enjoy an exemption from federal income taxes.

__________ includes anything that people generally accept as payment for goods and services.

Early in our nation's history,people generally accepted the importance of a central bank authority.

A central bank allows individual banks to deposit and to borrow funds.

Electronic cash is the newest form of money.

John searched for a new bank prior to filling out his direct deposit form at his new employer.He noted that Twenty/Four/Seven E-Bank,Inc. ,offered better interest rates on savings accounts and money market accounts;and it offered other amenities such as online banking and funds transfer that many traditional banks offer.What is the most logical reason that Twenty/Four/Seven can compete for customers by offering higher interest rates?

Which of the following can include an embedded radio-frequency antenna that allows the holder to access secure areas in buildings or buy gas with the swipe of a card?

When the Federal Reserve acts to reduce inflation,they decrease the reserve requirement.

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