David and michael often trade baseball cards of similar


1. In which of the following scenarios would bartering be most likely to become inefficient?

  • David and Michael often trade baseball cards of similar value with each other.
  • Mark paints Becky's house in exchange for a weekly supply of vegetables and fruits from Becky's farm for three months.
  • Debbie and Kristen trade half of their sandwiches with each other at lunch, so they each have one half tuna fish and one half chicken salad.
  • Steve has a truck and Bailey has a hybrid car; they trade cars for a week because Bailey needs to pull a trailer and Steve has a long road trip and wants better gas mileage.
  • Rachel wants Carolyn's lipstick, Carolyn wants Chloe's hair bow, and Chloe wants Rachel's eye shadow; they orchestrate a three-party trade, so each of them gets the item she wants.

2. Savers Bank and Thrifty Bank, two banks that are members of the Federal Reserve System, want to merge into one bank called Thrifty Savers Bank. What role would the Federal Reserve Board have in this merger?

Multiple Choice

  • It serves as a mediator throughout the merger process.
  • It has the authority to approve or disapprove of the merger.
  • It will shut down both banks for trying to merge.
  • It will determine which bank's president should head the new merged bank.
  • It will determine which banking services from each bank the merged bank should offer.

3. If the Federal Reserve Board increases reserve requirements for banking institutions

Multiple Choice

  • banks make fewer loans.
  • the money supply in the economy increases.
  • banks have to pay a lower interest rate on loans taken from the Fed.
  • banks have to pay a higher interest rate on loans taken from the Fed.
  • economic activity increases.

4. Local Bank is an institution that accepts money deposits and makes loans to individual consumers and businesses. Which of the following would Local Bank most likely have in common with all other banking institutions?

Multiple Choice

  • Its objective is not profit, but rather, helping others with their financial needs.
  • Its objective is to earn money by managing, safeguarding, and lending money to others.
  • It has no sales revenues.
  • It blames politicians for all the economic problems that exist in the United States.
  • It must perform two or more banking functions in order to stay competitive.

5. Gary is in the process of buying a new home, and he decides to go to a savings and loan association to get a mortgage to help him pay for his home. In this scenario, Gary's new home is pledged as a guarantee, or _____ that he will repay the loan.

Multiple Choice

  • premium
  • collateral
  • equity
  • trust
  • interest

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Business Management: David and michael often trade baseball cards of similar
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