Chapter 15 Money and the Financial System Quiz

1. When currency is stable, it provides no incentive to save. 
Select one: True False •/ 
The correct answer is 'False'. 
2. The three important functions of money are that it serves as a medium of exchange, a measure of value, and a store of value. 
Select one: True 
False X 
The correct answer is 'True'. 
3. A savings account is the same thing as a money market account. 
Select one: True False V 
The correct answer is 'False'. 
4. A credit union is owned and controlled by a larger bank. 
Select one: True False s 
The correct answer is 'False'. 
5. Mutual funds spread the risk of investing across many securities 
Select one: True ../ False 
The correct answer is 'True'. 
6. Most brokerage firms also provide other services such as investment banking or selling securities. 
Select one: True ../ False 
The correct answer is 'True'. 
7. Advantages of direct deposits of paychecks and other income to consumers include convenience, safety, and potential interest earnings. 
Select one: True ../ False 
The correct answer is 'True'. 
8. Most experts believe that banks will continue to consolidate and get larger over time. 
Select one: True False V 
The correct answer is 'False'. 
9. The U.S. government created the Troubled Asset Relief Program (TARP) in an effort to prevent economic collapse during the most recent financial recession. 
Select one: True ../ False 
The correct answer is 'True'. 
10. Rapid advances and technological innovations are requiring the banking industry to change. 
Select one: True ../ False 
The correct answer is 'True'.