Economics Practice MCQ Page 29

Multiple Choice questions for Economics in the sets of 10 each on one page with questions and answers. All sets are useful in the preparation of subject tests for employment or admission.
Question: 1718   One concerned raised by the government 's building of surpluses in the Social Security fund is
  1. fiscal drag.
  2. excessive consumption spending.
  3. the possibility of a trade deficit.
  4. bracket creep.
Question: 1719   The budget process of the federal government includes all of the following expect
  1. executive formulation review.
  2. line-item executive review.
  3. congressional action.
  4. budget execution and control.
Question: 1721   All of the following are financial intermediaries except
  1. a commercial bank .
  2. a savings -and loan association.
  3. a department store's credit-card division .
  4. a credit union.
  5. an insurance company.
Question: 1724   Which of the following is not a social benefit resulting financial intermediation?
  1. Pooling of risks.
  2. Shorter terms of loans for borrowers.
  3. An economical concentration of information.
  4. Improved liquidity for lenders.
  5. Reduced information costs for borrowers and lenders.
Question: 1726   Most of the profits of banks come from
  1. service charges on checking accounts.
  2. subsidies from the Federal Reserve.
  3. lending at higher interest rates than they pay on deposits.
  4. feeds charged to customers for transactions and services .
  5. stealing the deposits of customers.
Question: 1730   The assets of commercial banks include all of the following expect
  1. government bonds.
  2. saving accounts.
  3. loans to firms .
  4. vault cash.
  5. deposits at the Fed.
Question: 1731   A bank's reserves include
  1. only vault cash.
  2. vault cash and deposits at the Fed.
  3. vault cash and loans due within thirty days.
  4. only deposits at the Fed.
  5. vault cash ,deposits at the Fed , and deposits at other banks.
Question: 1733   After the collapse of central planning in Russia,
  1. state run banks continued to hold their monopoly over banking .
  2. the government's Inkombank failed.
  3. a private banking system had to be created .
  4. the new government simply asked foreign banks to manage the ruble.
Question: 1739   The "too -big-to-fail" doctrine was created to
  1. make it easier for the Treasury to sell bonds.
  2. limit losses should a relatively large bank fail.
  3. guarantee major loans made by U.S.banks to other countries.
  4. provide extra deposit insurance for all nonprofit charitable banks.
Question: 1741   The required -reserve ratio specifies the ratio of reserves to
  1. currency.
  2. vault cash.
  3. the total money supply.
  4. loans.
  5. deposits.
Question: 1744   The discount rate is the
  1. reduced interest rate banks give to their largest customers.
  2. interest rate that banks pay on deposits.
  3. interest rate that Fed pays on the deposits of banks.
  4. interest that the Fed charge on loans to banks.
  5. interest rate that banks charge one another for loans.
Question: 1747   Government deposit insurance cut the link between the ability of a bank to attract deposits and
  1. the money supply .
  2. interest rates.
  3. the real estate market.
  4. bank performance.