Introduction to Business

Chapter 12: Money and Financial Institutions

Chapter Practice Review Quizzes

1
Which best describes the difference between bartering and the monetary system?
A)Bartering does not work in undeveloped countries, but the monetary system does.
B)Monetary means trading money for money, bartering means trading goods for goods.
C)Bartering means trading goods for other goods instead of using money as a standard of value.
D)Bartering is never used in developed countries, and only rarely in undeveloped countries.
2
Which is NOT considered money?
A)coins
B)currency
C)checks
D)services
3
What happens if money is stable?
A)It loses its value.
B)Its value remains unchanged.
C)Its value fluctuates.
D)It loses acceptance with most people.
4
What is a financial institution?
A)a bank account
B)a firm that manages money
C)a record of the amount of money a customer has
D)a medium of exchange
5
Which is best for storing money for a few days?
A)checking accounts
B)savings accounts
C)electronic funds transfers
D)direct deposits
6
How do banks make most of their money?
A)transferring money
B)collecting collateral
C)interest from loans
D)fees from checking accounts
7
Which is NOT a type of bank loan?
A)mortgage
B)commercial loan
C)line of credit
D)safe-deposit box
8
Which is another term for full-service bank?
A)commercial bank
B)savings and loans association
C)credit union
D)international bank
9
Which would be considered "digital cash"?
A)dollars
B)coins
C)a credit card
D)a bartered service
10
Which types of investments are savings and loan associations known for?
A)commercial loans
B)mortgages
C)lines of credit
D)personal loans
11
Which is NOT true of savings and loan associations?
A)They have not changed much over the years.
B)Many have recently failed.
C)They are now more similar to other banking institutions.
D)They offer more services now than they did originally.
12
How is a credit union different from other financial institutions?
A)Credit unions do not offer loans.
B)Credit unions do not offer credit cards.
C)Credit unions offer interest on their savings accounts.
D)Credit unions do not make a profit.
13
Which financial institution does NOT offer loans to its customers?
A)mortgage companies
B)finance companies
C)brokerage firms
D)insurance firms
14
Which statement about the Federal Reserve is true?
A)You can get a loan from the Federal Reserve.
B)The Federal Reserve has always been part of the U.S. banking system.
C)The Federal Reserve is a full-service bank.
D)There are twelve regional Federal Reserve banks.
15
What is the Federal Reserve's main mission?
A)to monitor inflation
B)to provide the U.S. with a safe and stable monetary system
C)to determine the amount of money in circulation
D)to act as the government's fiscal agent
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