Chapter 10: Economics

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

What is the simple interest of a loan for $1,000 with 5% interest after 3 years?

$150

A dollar bill typically lasts..

1 year in circulation.

Which of the following is an example of an informal bank?

A merchant who stores money for customers.

Which type of bank provides the most services and plays the largest role in the economy?

Commercial Bank

Which of these currencies became worthless by the end of the Civil War?

Confederate currency

Which of the following does NOT belong in the M2 category?

Currency held in bank vaults

The government agency that covers customer deposits if a bank fails is the..

Federal Deposit Insurance Corporation (FDIC).

In case of a bank failure, customer deposits up to $100,000 per account are guaranteed by the..

Federal Deposit Insurance Corporation.

The central banking system for the United States that was set up in 1913 is known as the..

Federal Reserve System.

The nation's first true central bank was the..

Federal Reserve System.

Which Act abolished the independence of the savings and loan industry and transferred insurance responsibilities to the Federal Deposit Insurance Corporation (FDIC)?

Financial Institutions Reform, Recovery, and Enforcement Act

Which one of the following is NOT one of the four most common ways people can save money in banks?

Fractional reserves

What is the name for a monetary system in which paper money and coins are equal to the value of a certain amount of gold?

Gold standard

Which of the following is an example of money as a store of value?

Making money at a garage sale and saving it.

What is an example of commodity money?

Precious stones

The Antifederalist movement, which supported a decentralized banking system, was led by..

Thomas Jefferson.

The money in checking accounts is referred to as..

a demand deposit.

A bank chartered, or licensed, by the national government is called..

a national bank.

Commodity money can only work in..

a simple economic system.

All of the following are characteristics of money EXCEPT..

accountability.

"Principal" is the..

amount of money borrowed.

All of the following are examples of commodity money EXCEPT..

an IOU.

ATMs are computers that are used..

by customers to conduct their banking business.

A NOW account is a type of..

checking account that pays interest.

"Objects that have value in themselves and that are also used as money" is the definition for..

commodity money.

Uniformity of currency means that it is..

easy to count and measure.

Assets that have liquidity are..

easy to turn into cash.

The fractional banking system..

ensures growth in the economy.

"Default" refers to the..

failure to pay back a loan.

Money that has value because the government has ordered that it is an acceptable means to pay debts is referred to as..

fiat money.

The type of currency used in the United States today is..

fiat money.

A bank is an institution..

for receiving, keeping, and lending money.

A banker exchanges bank notes for silver and gold money then leaves town and disappears. This is a..

fraud.

"Specie" is a term used as early as the 1600s for..

gold and silver coins.

All of the following are services provided by banks and other financial institutions EXCEPT..

increasing the amount of money in circulation.

The price paid for the use of borrowed money is referred to as the..

interest.

Representative money gets its value from the fact that..

it represents objects of value for which it can be exchanged.

The ability to be used as, or directly converted to, cash is..

liquidity.

All of the following are examples of a use of money EXCEPT a..

means of barter.

Anything that is used to determine value during the exchange of goods and services is a..

medium of exchange.

A bank that belongs to the Federal Reserve System is called a..

member bank.

All of the following are considered liquid assets EXCEPT..

money market mutual funds.

Certificates of Deposit..

offers a guaranteed rate of interest over a certain period of time.

Compound interest is interest paid..

on both principal and accumulated interest.

For a traveler, paper currency would be preferable to coins because of..

portability.

An example of a stored value card is a(n)..

prepaid phone card.

"Objects that have value because the holder can exchange them for something else of value" defines..

representative money.

The National Banking Acts of 1863 and 1864 gave the federal government power to do all the following EXCEPT..

seize the assets of any individual.

The Free Banking Era between 1837 and 1863 was dominated by..

state-chartered banks.

Barter is..

the direct exchange of one set of goods or services for another.


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