79. The Fed requires banks to hold funds against the deposits its customers have in their checking and savings accounts. The amount of funds the bank must hold is specified as a percentage of deposits known as the:

A) prime rate. B) working capital requirement. C) discount rate. D) reserve requirement.

80. President Koolov, the leader of the nation of Rapidia, is reluctant to raise taxes, but wants to expand many government services and increase the size of the Rapidian armed forces. He has decided to pay for all of the desired expenditures by printing more money. If President Koolov carries out his plan and rapidly increases the supply of money, Rapidia is likely to experience:

A) a severe recession. C) widespread surpluses of goods and services.

B) reduced private sector spending. D) an increase in the rate of inflation.

81. The Fed has just bought several billion dollars worth of U.S. government securities. The most likely reason the Fed did this was to:

A) decrease the size of the national debt.

B) improve its financial position by investing in relatively safe interest-earning assets.

C) stimulate the economy by increasing the amount of money in circulation.

D) drive up interest rates to cool off inflationary pressures.

82. Herb has $20,000 in an interest-bearing time deposit with the Cherryhill Bank and Trust Company. Herb is earning a relatively attractive rate of interest on this account, but he had to agree not withdraw any of the funds until the end of a three year period. This type of account is known as a(n):

A) passbook savings account. C) individual deferred earnings account (IDEA).

B) negotiable order of withdrawal (NOW) account. D) certificate of deposit (CD).

83. Which of the following can have an embedded radio-frequency antennae that allows the holder to access secure areas in buildings and buy gas with the swipe of a card?

A) Smart cards B) Direct deposit cards C) E-cards D) Check conversion cards

84. Hal no longer receives a paycheck; instead, he has his employer deposit his pay directly into his account at the Mortonville Bank. He also has a card issued by his bank that looks like a credit card. When he shops at his local supermarket and department store, the retailer puts the card in a slot, and the appropriate amount of money is transferred from Hal's account to the store's account. Hal is making use of a(n):

A) funds exchange network. B) NOW card. C) debit card. D) automatic funds deposit card.

85. The ________ was established to assist the smooth flow of money among nations.

A) International Monetary Fund C) World Bank

B) Foreign Exchange Bank D) International Exchange Center