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DSST Money and Banking Exam Practice Test 2
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DSST Money and Banking exam covers the basics of of the role and kinds of money; commercial banks and other financial intermediaries; central banking and the Federal Reserve System; money and macroeconomics; U.S. monetary policy; and the international monetary system. The exam contains 100 questions to be answered in 2 hours. Exam content, in brief: I. The Role and Kinds of Money – 5% a. Alternative definitions of money b. Money and other assets 2. Commercial Banks and Other Financial Intermediaries – 25% a. Regulation of the banking industry b. Structure of the banking industry c.... Show more
DSST Money and Banking Exam Practice Test 2
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25 Questions

1. Which of the following is a tool of indirect finance?
2. A reason why a monetary policy might not be fully effective in stabilizing the economy is that
3. The larger share of commercial banks’ assets is in the form of
4. The Board of Governors is the key player in monetary policy decisions because
5. Which of the following was NOT a reason for the expansion of U.S. banking operations abroad?
6. When Joanna withdraws $1 - 000 from her money market mutual fund and deposits them in her checking account,
7. Which of the following men championed the creation of the First Bank of the United States?
8. Which of the following statements best describes how the International Monetary Fund finances its loans during sovereign debt crises?
9. Why did monetarists like Milton Friedman favor strict rules of monetary policy?
10. Before 2008, which of the following actions would the Federal Reserve take in order to increase the money supply?
11. Current capital adequacy regulation requires that a bank’s
12. In the CAMELS rating system, the C stands for
13. If a central bank lowers the primary credit rate, we should expect the money supply to
14. In the U.S. Balance of Payment, interest on German Treasury securities paid to an American mutual fund is recorded as a
15. If an accommodating monetary policy of the central bank successfully lowers interest rates, we should expect a
16. Which of the following actions would help a mutual fund maintain its liquidity when faced with an unusually high volume of withdrawals?
17. Which of the following is NOT an example of a fiscal policy?
18. After 2009, if the FOMC announced its intention to raise the federal funds rate target by 25 basis points, the next day, the
19. Gross domestic product is the sum of which of the following components?
20. What do economists refer to when they talk about the “policy trilemma”?
21. Which of the following is an action taken by the U.S. Treasury in response to the financial crisis of 2008/2009?
22. Which of the following would be an example of banks’ increasing reliance on off-balance sheet activities?
23. In many countries, central authorities impose reserve requirements to influence money supply and help prevent bank runs. In the United States, reserve requirements are decided by the
24. The Board of Governors influences who is appointed President at each regional Reserve Banks by
25. In the United States, the central authorities that provide liquidity guarantees and credit guarantees are the