Chapter 10 Flashcards
Which of the following is an example of money as a unit of account?
Checking the price of a camera at several store before buying it at the lowest price
Which of the following is an example of a barter system?
Instead of paying rent, you clean house for your owner.
Which of the following is the main disadvantage of using shells as money instead of coins?
Uniformity
Which of the following is an example of of representative money?
An IOU note
What is the purpose of the Federal Deposit Insurance Corporation (FDIC)?
To make sure that government has enough gold to cover its expanses
What did the federalist believe about banking?
They believed that a centralized banking system was necessary
What occurred during the free banking era
Currency varie widely from state to state
What are “ greenbacks”
Commodity money used by the union during the civil war
What is a mortgage used to purchase?
Real estate
Why is using coins as money easier than using gold bars?
Coins are more portable
What happens during a bank run?
More customers withdraw money than the bank has on hand
What condition is necessary for a fiat money system to work?
The government must control the money supply
What happens when you make a purchase using a credit card?
The credit card issuer pays the store.
What is the larges source of income for blanks?
The interest hey receive from loans
You need a new computer, and you will need a loan in order to buy one. Which lender is most likely to charge you the highest interest rate on your loan?
Finance company
Near money includes
Deposits in savings accounts and money market mutual funds
When you pay for a new cd with a debit card, you authorize the transfer of money from your account to the music stores account. In other words, a payment by debit card is the electron. Form of a payment by
Check
Penny is an artist, and John a carpenter. Penny agrees to paint a portrait of John’s family in exchange for a handmade table created by John. How did Penny John pay for the goods in their transaction?
Through bartering
Which of the following statement is true?
All of the above
In the 1800’s, people in mining towns in the west often paid for goods with gold nuggets or gold dust. What was the function of gold?
It was used as currency
In he 1990s, the Russian people list confidence in the value if the ruble, and many were no lonelier willing to sell goods and services in exchange die Russian currency. Which characteristic of money did the Russian currency lack?
Acceptability
American leaders in the early United States wanted to establish a stable banking in order to
Promise international trade and economic growth
What is the one reason why many people distrusted the banking system during the free banking era of the first half of the 1800s
Many banks did not have enough gold or silver to back the paper money they issued
How did the United States government make the American public have confidence in he nations currency in the 1870s?
The government adopted a gold standard.
You decide to open a savings account, and you notice a sign in your bank that indicates deposits are FDIC insured. What protection does this give you?
If the bank fail, your deposits protected up to $100,00.
How did high interest rates affect savings and loans (S&Ls) in the 1980s?
S&Ls made money, because they earned high interest on loans they made throughout the 1980s.
