Brainscape's Knowledge GenomeTM

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


See full index

Econ > Money and Banking > Flashcards

Money and Banking Flashcards

1
Q

is anything that people will accept as payment for goods and services

A

Money

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

Money performs three important functions.

A

(medium of exchange, standard of value, store of value)

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

is the exchange of goods and services without using money.

A

Barter

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

A medium of exchange is a mean through which goods and services can be exchanged

A

A medium of exchange

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

determines the economic worth in the exchange process.

A

A standard of value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

is something that holds its value over time.

A

A store of value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

is a sustained rise in the general level of prices.

A

Inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

One situation where money does not function well as a store of value is when the economy experiences .

A

significant inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Physical Properties:

A

Durability
Portability
Divisibilities
Uniformity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Economic Properties

A

Scarcity
Acceptability
Stability of Value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Money Draws its value from three possible resources

A

Commodity money
Representative money
Fiat money

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

derives its value from the type of material it is consumed.

A

Commodity money

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

The most common form of commodity money throughout history has been coins made from

A

precious metals.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

is paper money back by something tangible—-gold or silver– that gives it value.

A

Representative money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

The earliest forms of representative money were seen in the

A

Middle Ages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

is declared by the government and accepted by citizens to have worth

A

Fiat Money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The value of the U.S. dollar was linked to the value of gold until

A

1971

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

is paper money and coins.

A

Currency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Checking accounts are called

A

demand deposits.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

is savings accounts, and time deposits that can be converted into cash relatively easily.

A

Near money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Most demand deposits are ________________ that can be converted into currency simply by writing a check

A

non interest-bearing checking accounts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Traveler’s checks are also considered

A

demand deposits,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

accounts, are interest-bearing savings accounts against which drafts may be written.

A

Negotiable Order of Withdrawal (NOW)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

are funds that people place in a financial institution for a specific period of time in return for a higher interest rate which are often placed in a certificate of deposit.

A

Time deposits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

place restrictions on the number of transactions you can make in a month and require you to maintain a certain balance in the account in order to receive a higher rate of interest.

A

Money market accounts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Economists use various instruments to measure the money supply, but the most often cited are .

A

M1 and M2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

is the narrowest measure of the money supply, consisting of currency, demand deposits, and other checkable deposits.

A

M1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

The element of are referred to as liquid assets, which means that they are or can easily become currency,

A

M1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

is a broader measure of the money supply, consisting of M1 plus various kinds of near money.

A

M2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

includes savings accounts, small-denominational time deposits, and money market mutual funds.

A

M2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Modern banking arose in in the late Middle Ages

A

Italy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

is the practice of holding only a fraction of the money deposited in a bank and lending the rest.

A

Fractional reserve banking

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

A state bank is a bank chartered by a

A

state government.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

was the Secretary of Treasury in 1789.

A

Alexander Hamilton

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Hamilton was a leading ____ who believed in a strong central government

A

Federalist

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Hamilton argued that the __ implied that the federal government had the authority to create a national bank to carry out its duty to regulate currency

A

Constitution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

was chartered in 1791

A

The First Bank of the US

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Congress finally agreed to charter ___ in 1816.

A

the Second Bank of the United States

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

was an outspoken critic who mistrusted banks with paper money

A

President Andrew Jackson

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

During his period, all banks were state banks, each of which issued its own paper currency, called ____

A

bank notes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Some of these banks were located in ___ to discourage people from redeeming it

A

remote areas

42
Q

These U.S. bank notes were called

A

greenbacks.

43
Q

In 1863, Congress passed the_____ , which led to the creation of a system of national banks.

A

National Banking Act

44
Q

The act provided for a ____ backed by the US Treasury bonds and regulated the minimum amount of capital required for national banks as well as the amount of reserves necessary to back the currency.

A

national currency

45
Q

In 1900, the government officially adopted the ___

A

gold standard.

46
Q

The ____ is a system that backs the basic monetary unit with a set amount of gold.

A

gold standard

47
Q

In 1913, Congress passed the ____ which established the Federal Reserve System- a true central bank.

A

Federal Reserve Act

48
Q

The Fed. consists of _____

A

12 regional banks with a central decision-making board.

49
Q

provides financial services to the federal government, makes loans to banks that serve the public, issues Federal Reserve notes as the national currency, and regulates the money supply to ensure that money retains its purchasing power

A

The Fed.

50
Q

Part of FDR’s New Deal program was the _____
The act instituted reforms such as regulating interest rates that banks could pay and prohibiting banks from selling stock.

A

Banking Act of 1933

51
Q

The ___ provided federal insurance so that if a bank failed, people would no longer lose their money.

A

Federal Deposit Insurance Corporation (FDIC

52
Q

The term__ is used to refer to almost any kind of financial institutions that takes in deposits and makes loans, helping individuals, businesses, and gov. to manage their money.

A

bank

53
Q

The goal of a bank is to ____

A

earn a profit.

54
Q

All financial institutions receive a___ from the government, either state or federal.

A

charter

55
Q

____are the oldest form of banking and are the financial institutions most commonly thought of as banks.

A

Privately owned commercial banks

56
Q

___ were initially established to provide loans to businesses

A

Commercial banks

57
Q

provide basic banking services; investment banks bought and sold assets through the financial markets.

A

Commercial banks

58
Q

provide a wide range of services, including checking, savings, loans, investment assistance, and credit cards to both businesses and individual consumers.

A

Commercial banks

59
Q

___ led to a wave of mergers and consolidations, reducing the number of commercial banks from over 12,000 in 1990 to about 7,500 in 2005

A

Deregulation

60
Q

The ____ insures all commercial banks based in the United States.

A

FDIC

61
Q

All national commercial banks belong to the ___

A

Federal Reserve System.

62
Q

____ began in the United States in the 1830s

A

Savings and loan associations (S&Ls)

63
Q

They (S&Ls) were originally chartered by individual states as mutual societies for two purposes— ____

A

to take savings deposits and provide home mortgage loans.

64
Q

In 1933, the federal government began charting S&Ls, and in 1934 the government established the ____

A

Federal Savings and Loans Insurance Corporation

65
Q

Many savings institutions raise financing through the sale of ___ , just as commercial banks do.

A

stock

66
Q

The first credit union in the United States began in ___ as state-chartered institutions

A

1909

67
Q

_______ created a system of federally chartered credit unions

A

**The Federal Credit Union Act of 1934

68
Q

Most credit unions have deposits insurance through the ___ , an organization similar to the FDIC.

A

National Credit Union Association (NCUA)

69
Q

The major difference between credit unions and other financial institutions is that credit unions have ___.

A

membership requirements

70
Q

___ are places where money can be bought and sold

A

Banks

71
Q

By using these services, customers are able to do three things:

A

Store Money
Earn Money
Borrow Money

72
Q

You can store important papers and valuables through the use of a ____

A

safe deposit box.

73
Q

One common loan a bank makes is a ___

A

mortgage

74
Q

So if the borrower ____ (stops making payments) the lender takes control of the property.

A

defaults

75
Q

__ are issued by banks to users who are borrowers

A

Credit cards

76
Q

___ tightly regulated the amount of interest that banks could pay on deposits and could charge on loans.

A

The Banking Act of 1933

77
Q

___ in the 1980’s and 1990’s ended these restrictions and brought major changes to the banking industry.

A

Deregulation

78
Q

______ lifted the last restriction from the Act of 1933 that had prevented banks, insurance companies, and investment companies from selling the same products and competing with one another.
This change allowed banks to sell stocks, bonds, and insurance.

A

The Financial Services Act of 1999

79
Q

Real estate prices ballooned, in part because of

A

Iax lending standards.

80
Q

The banks and other financial companies would bundle the mortgages and sell them as ____ , an individual similar to a bond.

A

mortgage-backed securities

81
Q

The easy profits encouraged banks to generate more ___ by lowering their lending standard further, which drove house prices even higher.

A

Mortgages

82
Q

___, particularly computer technology, has changed the way customers use banks, producing a system generally referred to as electronic banking

A

`Technology

83
Q

Banks have begun using ___ , devices that allow bank customers to make deposits, withdrawals, and transfers and check account balances at any time without seeing a bank offer

A

automated teller machines (ATM)

84
Q

___ are the oldest and most familiar of the developments in electronic banking.

A

ATMs

85
Q

In order to use one you must have a personal ___ for your ATM/Debit card.

A

identification number (PIN)

86
Q

Debit Cards are sometimes called ___.

A

check cards

87
Q

These cards are sometimes called prepaid cards

A

stored value cards

88
Q

____ allows customers who have set up accounts with a bank to perform practically every transaction without setting foot in a bank.

A

Electronic banking

89
Q

_____ is a crime in which one person fraudulently uses another’s identity to obtain credit or to access financial accounts.
Identity theft can be accomplished easily and there is little risk of getting caught

A

Identity Theft

90
Q

is the measure of your dependability to repay a loan

A

Creditworthiness

91
Q

is a measure of your financial responsibility.

A

Character

92
Q

is a measure of a consumer’s ability to repay a debt on time.

A

Capacity

93
Q

___ is a measure of the value of things a consumer owns that could be sold or cashed in to repay a loan
Stocks, Bonds, Buildings, land are examples of __

A

Capital

94
Q

A person’s record of paying bills and debts over time is one’s

A

credit history

95
Q

A consumers credit rating is the measure of a person’s

A

creditworthiness.

96
Q

___ is based off of Making Payments On Time, current debt, other credit history, recent applications for credit, and type of credit used.

A

Credit Rating

97
Q

___ is a system that assigns a number, or score, to each consumer indicating whether this person is a good or bad credit risk.

A

Credit Scoring

98
Q

The score is based on a formula that was originally developed by the___ in the 1950

A

Fair Isaac Company (FICO)

99
Q

___ scores are used to set interest rates on some loans

A

FICO

100
Q

Most experts recommend that consumers review their credit files______ to determine whether mistaken information appears in them

A

at least once per year

Econ (1 decks)

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