Question 1

Identify and discuss the tools and products that electronically transfer funds.

Accepted Answer

The answer of Identify and discuss the tools and products...

Question 2

As the bank has grown and expanded to other towns in its region, several of its business customers are participating in global trade. Which of the following services provided by the bank would help companies conduct international business?
A) letters of credit
B) banker's transactions
C) certificates of deposit
D) trade exchange letters

Accepted Answer

Banks help companies conduct business in other countries by providing three services: letters of credit, banker's acceptances, and currency exchange. When a business signs a letter of credit with its bank, it gives the bank permission to disburse funds from its account in payment of foreign goods and services, providing that certain conditions are met, as designated on the letter of credit.

Question 3

The Bank of Bramblewood promotes a sustainability initiative encouraging all transactions increasingly to be paperless. Each time the bank issues checks or sends out a paper statement, it includes a promotion asking customers to support methods that eliminate paperwork. The bank encourages customers to use debit cards, smart cards, direct deposit, and direct payments, as well as online statement retrieval. All of these tools are used in conjunction with the bank's
A) electronic funds transfer system.
B) automated deposit system.
C) check clearinghouse system.
D) limited documentation checking program.

Accepted Answer

In an electronic funds transfer (EFT) system, funds can be transferred more quickly and more economically than with paper checks. EFT tools include electronic check conversion, debit cards, smart cards, direct deposits, and direct payments.

Question 4

During Red's time as head of the Bank of Bramblewood, the bank offered three services: time deposits, demand deposits, and home and business loans. Under Patty's leadership, the bank offers those same services, a variety of investment opportunities such as mutual funds and bonds, and ________ through the Internet, which supports a number of services such as paying bills directly from customers' accounts, direct deposit, and transferring money.
A) demand deposits
B) online banking
C) passbook banking
D) composite banking

Accepted Answer

Just about all large and small banks now provide online banking services, which include bill payment transactions and the movement of funds from one account to another.

Question 5

Under Patty's leadership the Bank of Bramblewood would like to increase its loans to customers, but its resources are currently limited by a high reserve rate. As a Federal Reserve member bank, it will borrow additional funds from the Fed and charge its customers an interest rate that is higher than the
A) reserve rate.
B) federal funds rate.
C) discount rate.
D) prime rate.

Accepted Answer

The discount rate is the rate of interest the Fed charges its member banks when they borrow money.

Question 6

Since the Great Depression, the Bank of Bramblewood has the FDIC designation. What does this mean?
A) The bank is a member of a consortium of banks that can pool funds to make loans too big for any single bank to finance.
B) The bank gives preference to veterans.
C) The depositors of the bank are also its owners.
D) Individual accounts at the bank are insured by an independent agency of the federal government.

Accepted Answer

The FDIC is the Federal Deposit Insurance Corporation, an independent government agency that insures individual deposits in member institutions for up to $250,000.

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

Identify and discuss the tools and products that electronically transfer funds.

As the bank has grown and expanded to other towns in its region, several of its business customers are participating in global trade. Which of the following services provided by the bank would help companies conduct international business?

Since the Great Depression, the Bank of Bramblewood has the FDIC designation. What does this mean?