Economics chapter 10

Medium of exchange

A means through which goods and services can be exchanged

What did the National Banking Act of 1863 set up?

A system of national banks and a national currency

What are the advantages and disadvantages of electronic banking?

Advantages: convenience Disadvantages: hackable

Money

Anything that people will accept in exchange for goods or services

A major result of bank deregulation in the 1980's and the 1990's was hundreds of...

Bank mergers

Both seashells and corn have been used as money in the past. Which do you think is a better choice?

Corn. You can use individual kernels as currrency

The difference between credit cards and debut cards is that...

Credit cards are loans, while debit cards are withdrawals of existing funds

Automatic teller machines (atms) let customers...

Deposit and withdrawal funds at locations other than the bank

In what ways does the federal government act to safeguard the money of individual citizens?

FDCX, associations protected. They back our money. Federal reserve

From 1836 to 1863, there was no national oversight of banking. What was the result?

Financial panics and economic instability

The two original purposes of savings and loans were to take savings deposits and provide...

Home mortgage loans

Commodity money

Money that has intrinsic value based on the material form from which it is made

Representative money

Money that is backed by something tangible

Fiat money

Money that us declared by the government to have worth

Currency

Paper money and coins

A mortgage allows a consumer to...

Purchase a house without paying the whole value up front

Near money

Savings accounts and time deposits that can be converted into cash relatively easily

Store of value

Something that holds its economic worth over time

Barter

The exchange of goods and services without using money

The term electronic banking generally refers to the use of...

The internet and computers to do bank transactions at home

Standard of value

The measurement of economic worth in the exchange process

For what purpose was the First Bank of the United States created?

To issue a national currency, control the money supply, and lend money

What is the purpose of the Federal Reserve System?

To make loans to banks, issue currency, and regulate the money supply