WISE MONEY REVIEW
What is a financial institution?
A financial institution is an organization that provides financial products and services to consumers.
What is the difference between fiat money and commodity money?
Commodity money (e.g., gold coin) has value in itself, while fiat money (e.g., U.S. dollar) has value because the government has declared that it is acceptable for paying debts.
How does money make it easier to trade, borrow, save, invest, and compare the value of goods and services?
Money acts as a medium of exchange, making trade easier. Money encourages specialization by decreasing the costs for exchange. Money acts as a store of value, making it easier to save and invest. Money acts as a measure of value, making it easier to compare the value of goods and services.
What is money?
Money is anything widely accepted as final payment for goods and services.
What are the characteristics of money?
durability, portability, divisibility, uniformity, limited supply, and acceptability.
What are the benefits of having financial institutions in the economy?
*Financial institutions provide products like checking and other accounts that help consumers manage money. They provide services and advice to help consumers meet their financial goals. *Financial institutions can provide a safe place for individuals to hold money, and they help channel money from savers to borrowers.
What are some of the types of financial institutions?
Banks, credit unions, and insurance companies are examples of financial institutions
How do financial institutions channel funds from borrowers to savers?
Financial institutions attract funds from savers by offering interest rates on savings. Financial institutions use depositors' savings to earn income by lending to borrowers or investing in other financial products. Financial institutions are able to pool the savings of many individuals in order to make loans to borrowers. Banks create money by lending.
What is the government's role in financial markets?
Government protects consumers in financial markets through regulation and enforcement by agencies such as the Securities and Exchange Commission and the Federal Reserve System.
What makes up the basic money supply in the United States?
The basic money supply in the United States is made up of currency, coins, and checking account deposits.
