#1
Which institution regulates banks in the United States?
Federal Reserve System
World Bank
International Monetary Fund
European Central Bank
#2
What is the primary purpose of financial reserves in banking?
To cover unexpected losses
To increase profits
To provide loans
To pay dividends to shareholders
#3
What is the primary function of the Federal Deposit Insurance Corporation (FDIC) in the United States?
To regulate the stock market
To insure deposits in banks
To set monetary policy
To oversee international trade agreements
#4
What does the term 'liquidity' refer to in banking?
The ease of converting assets into cash without loss of value
The amount of profit generated by a bank
The total number of customers served by a bank
The amount of physical cash held in a bank's vault
#5
What does the term 'interest rate' refer to in banking?
The rate at which banks lend money to the central bank
The rate at which banks lend money to each other
The rate at which banks pay interest on deposits
The rate at which banks charge borrowers for loans
#6
Which of the following is a function of the Federal Reserve System?
Issuing driver's licenses
Collecting income taxes
Regulating the money supply
Enforcing traffic laws
#7
Which of the following is NOT considered a type of financial reserve?
Cash reserves
Loan reserves
Capital reserves
Market reserves
#8
What is the purpose of the Basel III accord?
To regulate international trade
To improve banking supervision and risk management
To promote environmental sustainability
To facilitate currency exchange
#9
What is the role of the lender of last resort in the banking system?
To provide loans to individuals
To ensure banks have access to emergency funding
To regulate interest rates
To oversee bank mergers and acquisitions
#10
What does the term 'fractional reserve banking' refer to?
A banking system where banks hold reserves equal to 100% of their deposits
A banking system where banks hold only a fraction of deposits as reserves
A banking system where reserves are held in a single reserve bank
A banking system where reserves are held in gold and other precious metals
#11
What is the role of the central bank in managing monetary policy?
To maximize profits for commercial banks
To regulate interest rates and money supply
To provide loans to consumers
To oversee bank mergers and acquisitions
#12
Which of the following is NOT a tool of monetary policy?
Open market operations
Discount rate
Fiscal policy
Reserve requirements
#13
Which term refers to the process of a central bank buying government securities or other securities from the market?
Quantitative tightening
Quantitative easing
Tight monetary policy
Loose monetary policy
#14
What is the primary purpose of stress testing in banking?
To assess a bank's ability to withstand adverse economic conditions
To maximize profits for shareholders
To determine interest rates for loans
To evaluate the performance of bank executives
#15
What is the primary objective of quantitative easing (QE)?
To decrease money supply
To increase inflation
To reduce interest rates
To decrease government spending
#16
Which of the following is a measure of a bank's profitability?
Loan-to-Deposit Ratio
Net Interest Margin
Reserve Ratio
Liquidity Coverage Ratio
#17
Which of the following is a function of the Financial Stability Board (FSB)?
Issuing currency
Promoting international financial stability
Facilitating trade agreements
Regulating consumer loans