Chapter 2 - Financial Institutions

30 Questions | Total Attempts: 13

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Chapter 2 - Financial Institutions

This quiz checks your understanding of Financial Institution - Chapter 2. Before doing the quiz, you should consult your coursebook, lecture notes, and the slides you have received from our teacher. This quiz is designed by GROUP 2 - 17E14.


Questions and Answers
  • 1. 
    Question 1. The central bank controls the size of the monetary base.
    • A. 

      True

    • B. 

      False

  • 2. 
    Question 2. A great deal of the money in circulation is created by the central bank.
    • A. 

      True

    • B. 

      False

  • 3. 
    Question 3. Lending interests is usually higher than deposit interests in the commercial bank.
    • A. 

      True

    • B. 

      False

  • 4. 
    Question 4. The ability of commercial banks to maintain and create demand deposits by loans and investment influences the supply of money in a nation's economy.
    • A. 

      True

    • B. 

      False

  • 5. 
    Question 5. The commercial banks make a profit on their deposits, not on the loans they provide.
    • A. 

      True

    • B. 

      False

  • 6. 
    Question 6. The reserve ratio cannot be less than 30%.
    • A. 

      True

    • B. 

      False

  • 7. 
    Question 7. The money multiplier tells us how many dollars’ worth of deposits are created with each additional dollar of reserves.
    • A. 

      True

    • B. 

      False

  • 8. 
    Question 8. The more banks hold in reserve, the greater the money multiplier.
    • A. 

      True

    • B. 

      False

  • 9. 
    Question 9. The FED controls over the amount of money that households choose to hold as deposits in banks and the amount that banks choose to lend.
    • A. 

      True

    • B. 

      False

  • 10. 
    Question 10. One of the basic methods used by all central banks to control the money supply in an economy is the reserve requirement.
    • A. 

      True

    • B. 

      False

  • 11. 
    Question 11. To control the money supply, a central bank can directly set interest rates for loans such as mortgages, auto loans, or personal loans. 
    • A. 

      True

    • B. 

      False

  • 12. 
    Question 12. In the World Bank, loans go only to member governments, the agencies, or private firms carrying their member government’s guarantee.
    • A. 

      True

    • B. 

      False

  • 13. 
    Question 13. The International Monetary Fund (IMF) provides a source of international credit for long term borrowing to facilitate trade.
    • A. 

      True

    • B. 

      False

  • 14. 
    Question 14. A banking system is responsible for __________
    • A. 

      Operating a payment system and providing a loan

    • B. 

      Taking deposits

    • C. 

      Helping with investment

    • D. 

      All is correct

  • 15. 
    Questions 15. Which of the following is NOT a type of bank or banking system?
    • A. 

      Commercial Bank

    • B. 

      Central Bank

    • C. 

      Northern Bank

    • D. 

      Credit Union Bank

  • 16. 
    Question 16. Which type of bank is insured by the National Credit Union Share Insurance Fund?
    • A. 

      Central bank

    • B. 

      Investment bank

    • C. 

      Commercial bank

    • D. 

      Credit union

  • 17. 
    Question 17.  This is the symbol of the central Bank of _______ ?
    • A. 

      Australia

    • B. 

      Japan

    • C. 

      Vietnam

    • D. 

      England

  • 18. 
    Question 18. Which assets are generally purchased by central banks?
    • A. 

      Gold bullion or other precious metals.

    • B. 

      Foreign exchange reserves.

    • C. 

      Loans to governments.

    • D. 

      Real estate.

  • 19. 
    Question 19.What is the purpose of a central bank?
    • A. 

      Maintain healthy levels of inflation

    • B. 

      Work to create a healthy employment environment

    • C. 

      Control the money supply and change interest rates as needed

    • D. 

      All of the answers are correct        

  • 20. 
    Question 20.Which of the following statements is generally TRUE about central bank independence?
    • A. 

      Countries with the most independent central banks have the lowest inflation rates.

    • B. 

      Countries with the least independent central banks have the lowest inflation rates

    • C. 

      Countries without central banks have the lowest inflation rates.

    • D. 

      The degree of independence of a country's central banks has little to do with its inflation rate.

  • 21. 
    Question 21.Which financial institution whose purpose is to allow people to pool their resources in order to minimize the risk associated with accident, sickness, death, and other unpredictable circumstances?  
    • A. 

      Savings Institution

    • B. 

      Personal trust

    • C. 

      Insurance company

    • D. 

      Consumer Credit Institution 

  • 22. 
    Question 22. The functions of both World Bank (WB) and International Monetary Fund (IMF) are to:
    • A. 

      Assist the war-ravaged nations to overcome the aftermath of wars

    • B. 

      Assist developing countries

    • C. 

      Create a stable system of foreign exchange and facilitate trade

    • D. 

      All of the above.

  • 23. 
    Question 23. As one of the commercial banks in Vietnam, what is the type of Bank for Investment and Development of Vietnam (BIDV)?
    • A. 

      State-owned commercial bank

    • B. 

      Joint stock commercial bank

    • C. 

      Joint venture commercial bank

    • D. 

      Wholly-owned foreign owned bank

  • 24. 
    Question 24. As one of the commercial banks in Vietnam, what is the type of Shinhan Bank Vietnam?
    • A. 

      State-owned commercial bank

    • B. 

      Joint stock commercial bank

    • C. 

      Joint venture commercial bank

    • D. 

      Wholly-owned foreign owned bank

  • 25. 
    Question 25. Which is the former name of the State Bank of Vietnam?
    • A. 

      Trade Bank of Vietnam

    • B. 

      National Bank of Vietnam

    • C. 

      Bank of Vietnam

    • D. 

      Bank for Agricultural Development

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