Question

A bank’s T-account includes assets which are

items of value the bank owes to someone else.

the total of a banks worth.

items of value owned by the bank.

Which is true about a certificate of deposit (CD)?

It pays a lower interest rate than a savings account.

The time frame to deposit money is variable.

There is a penalty to withdrawal early.

What is one of the main differences between a bank and a credit union?

Typically a bank is owned and run by its members.

A credit union has to be FDIC insured, but not banks.

Typically a credit union is owned and run by its members.

Savings banks and credit unions are both examples of which of these?

U.S. government securities

depository institutions

Federal Reserve

In financial markets one of the main economics principles present is________.

nominal decision making

a command economy

supply and demand

Which of the following examples is excluded from being in the financial market for money?

A neighborhood watch service that charges by the day.

A household that deposits its savings in its local bank.

A tech startup that needs a loan.

Which of the following is considered a security?

$20 bill

debit card

savings bond

Which is inaccurate about banks' deposits?

Banks lend out all of their deposits to earn income.

Banks lend out most of the deposits to earn income.

Banks keep some of their deposits on hand as cash to enable them to pay out withdrawals by depositors.

Answer 1

(1) (C)

Assets represent value of items owned by the bank.

(2) (C)

Most CDs include a penalty for early withdrawal.

(3) (C)

(4) (B)

Both are depository institutions which accept deposit from people and pays interest on such deposits.

(5) (C)

Interest rate is determined by demand and supply of funds that can be lent and borrowed.

(6) (A)

(7) (C)

A savings bond can act as a collateral against loans (security).

(8) (A)

In fractional (reserve) banking system, banks do not lend out all of the deposits.