Chapter 16 Section 2 Quiz

This is the process by which banks record whose account gives up money and whose account receives money when a customer writes a check.

• Check Bouncing
• Checks and Balances
• Check clearing
• Discount Rate

What does a "fractional reserve banking system" mean?

• one that uses fractional paper currency as well as coins
• one that is required to report daily deposits to the Federal Reserve
• one that must keep most deposited money in reserve
• one that keeps only a small part of customers' deposits on hand

What is a bank holding company?

• A company that owns more than one bank
• A company that holds stock in the Federal Reserve
• The Federal Reserve's examining service
• Federal Funds Rate

Rate the Federal Reserve charges for loans to commercial banks.

• Net Worth
• Discount Rate
• Federal Funds Rate
• Check Clearing

Who issues U.S. paper currency?

• the Treasury Department
• the U.S. Mint
• the district Federal reserve banks
• the U.S. bank examiners

Bank examiners use this number to help determine a banks stability; its calculated by computing total assets minus total liabilities.

• Federal Funds Rate
• Net Worth
• Bank Holding Company
• Money Supply

What is the function of a bank examiner?

• to make sure banks are obeying laws and regulations
• to respond to banks about their daily reports to the Fed
• to carry on day-to-day functions within the bank
• to oversee decisions about major loans by each bank

The Federal Reserve provides all of the following services to the government except:

• issuing currency.
• acting as the federal government’s banker.
• handling government securities auctions.
• combining all banks into a single, central bank.