Concepts of Currency and Banking Quiz

Central banks don't directly provide consumer loans.

FDIC ensures deposits in banks, protecting depositors.

Commercial banks typically don't offer investment advice directly.

Credit card accounts are not typically considered deposit accounts.

Central banks control money supply, ensuring economic stability.

FDIC insures deposits, providing stability and confidence in the banking system.

Central banks focus on monetary policy; fiscal policy is typically handled by governments.

Fiat money's value is set by government regulation, not backed by a physical commodity.

Commercial banks primarily provide loans and accept deposits from customers.

Discount rate is the rate at which central banks lend to commercial banks.

Reserve requirements ensure banks hold a portion of deposits as reserves.

Fractional reserve banking can lead to bank runs due to partial reserve coverage.

Federal funds rate is the rate at which banks lend to each other overnight.

Repo rate is the rate at which the central bank buys securities from commercial banks.

OMO is used to control money supply by buying/selling government securities.

The Federal Reserve regulates banks, conducts monetary policy, and provides financial services.

SWIFT enables secure messaging and transactions between financial institutions globally.