Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics > Chapter 10 Quiz > Flashcards

Chapter 10 Quiz Flashcards

1
Q

Barter

A
  • direct exchange of goods + services
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Money

A

anything that can be used as

  • medium of exchange (can buy stuff)
  • unit of account (compare values)
  • store of value ( you can save it)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Currency

A
  • bills + coins used as money (all money is currency, not all currency is money)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

6 Characteristics of money

A
  1. Portability (can carry it around)
  2. Durability (wear + tear)
  3. Uniformity (all units worth the same)
  4. Divisibility (can be broken into smaller parts)
  5. Limited supply
  6. Acceptability (everyone agrees to use it)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

3 types of Money

A
  1. Commodity Money: something that has value on its own
  2. Representative Money: paper money backed by a commodity (Gold Standard)
  3. Fiat Money: money that has value because the government said so
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Fractional Reserve Banking

A
  • a system where banks only keep a portion of deposits on hand, and lend out the rest
    (how banks make money)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Bank Run

A
  • panic where all customers try to withdraw their money at once
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Federal Reserve

A
  • US central bank
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Federal Deposit Insurance Corporation (FDIC)

A
  • insures deposits up to $250,000
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Money Supply

A
  • total amount of money in an economy
  • M1: cash, checking
  • M2: cash, checking, saving accounts
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Banks

A
  • institution for keeping, storing and lending money

- connecting savers and borrowers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Bank Services

A
  • Loans: mortgage (loan used to purchase real estate)

- Installment Loans (car loans)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

4 Types of accounts

A
  1. Saving accounts: your money is lent out
  2. Checking accounts: your money is liquid
  3. Certificated of deposit: savings account where you can’t withdraw the money for a set time (CD)
  4. Money Market Account/ Money Market Mutual Fund: pools money to invest in bonds (not FDIC insured)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Credit Unions

A
  • cooperatively owned and not for profit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Investing

A
  • using your money to make money
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Return

A
  • money earned on top of an initial investment
17
Q

Risk of Investments

A
  • the possibility of your investment losing money
18
Q

Liquidity

A
  • the ability of an asset to be used as or converted into cash
19
Q

Asset

A
  • anything of value
20
Q

Financial System

A
  • system that allows savers/ borrowers/ investors to easily find each other
21
Q

Financial Intermediary

A
  • Commercial banks/ investment banks/ credit unions
22
Q

Diversification

A
  • spreading investment across multiple assets to reduce risk
23
Q

Bonds

A
  • a certificate representing a loan issued to a government or corporation (how governments borrow money)
24
Q

3 Components of Bonds

A
  1. Coupon rate: interest rate paid on the bond (this drives return)
  2. Maturity Date: when bond pays out (when payment is due)
  3. Par Value: what bonds costs/ pays out
25
Q

5 Types of bonds (safest to riskiest)

A
  1. Savings Bonds: issued by US govt.
  2. Treasury Bonds
  3. Municipal Bonds: issued by local govts.
  4. Corporate Bonds: issued by corporations
  5. Junk Bonds: high risk bond; issued by someone who has declared bankruptcy
26
Q

Stocks

A
  • certificate representing ownership in a corporation
27
Q

2 ways to profit from stock

A
  1. Capital Gain: sell stock for more than you paid (share prices can go down)
  2. Dividend: share of profits paid to shareholders (companies may lose money or not pay dividends)
28
Q

2 Types of Stocks

A
  1. Income Stock: pays a dividend

2. Growth Stock: doesn’t pay a dividend

29
Q

2 different exchanges

A
  • NYSE: large, traditional companies

- NASDAQ: tech and energy

30
Q

Stock Indexes

A
  • estimate market performance by tracking a representative sample of corporations
31
Q

Dow Jones (DIA)/ S+P500 (SPDR)

A

30 Companies/500 companies

32
Q

Mutual Funds

A
  • pooling money from investors to buy a diverse range of stocks, bonds, and other assets (easy diversification/ less personal control)
33
Q

Interest

A
  • price paid to borrow money (cost of borrowing)

- price you are paid as a lender

Economics (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions