GBS151 Chapter 15 WORKSHEET (17 pts) (3)

GBS151 Chapter 15 WORKSHEET (17 pts) (3) - Chapter 15 Money...

Info icon This preview shows page 1. Sign up to view the full content.

Chapter 15: Money and Banking WORKSHEET (17 pts) Pages 386-408 1. Money serves three functions, which are: Medium of exchange, store of value, and measure of worth 2. What is the main function of financial institution? Is to ease the flow of money from users with surpluses to those with deficits by attracting funds into checking and savings accounts 3. Name four nondeposit institutions: pension fund, insurance companies, finance companies, and securities investment dealers (brokers) 4. Suppose a U.S. company wants to buy a product from a Russian supplier. For a fee, it can use one of the three services provided by its bank; the three services are: currency exchange, letters of credit, and banker’s acceptances 5. Which country has the most ATMs? Asia 6. The FDIC, a government agency that supervises banks and insures deposits in banks and thrift institutions was created by: President Franklin D. Roosevelt When? During the Depression era 7. Arizona is a part of which Federal Reserve District? 12 8. What is the reserve requirement? Is the percentage of its deposits that a bank must hold in cash or on deposit with
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: the ³ederal Reserve Bank 9. When are banks subject to prosecu±on? ´hey fail to maintain systems for iden²fying and repor²ng suspicious ac²vi²es that indicate possible drug transac²ons and money laundering. 10. What program was designed to reduce terrorism risks, requires banks to be´er know the customer’s true iden±ty? USA PA´RIO´ Act 11. What is the Automated Clearing House? Is an electronic funds transfer system that provides interbank clearing of electronic payments for the na²on’s ±nancial ins²tu²ons 12. What two United Na±ons agencies help to Fnance interna±onal trade? ´he World Bank and the Interna²onal Monetary ³und 13-17 Start with a $1,000 deposit and assume a reserve requirement of 15 percent. Trace the amount of money created by the banking system a³er Fve lending cycles. Cycle 1: $1,000 X .85 =$850.00 Cycle 2: 850X.85 = 722.50 Cycle 3: 722.50X.85= 614.12 Cycle 4: 614.12X.85= 522.00 Cycle 5: 522X.85 = 443.70 $4,152.32 (+315%)...
View Full Document

  • Spring '14
  • Federal Reserve System, Federal Reserve bank, reserve requirement, Federal Reserve District

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern