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Money Money Money Flashcards

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1
Q

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

A

money

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2
Q

A ___ is a means through which goods and services can be exchanged

A

medium of exchange

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3
Q

___ is the exchange of goods and services without using money

A

barter

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4
Q

A ___ determines the economic worth in the exchange process

A

standard of value

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5
Q

A ___ is something that holds its value over time

A

store of value

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6
Q

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

A

inflation

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7
Q

___ is a sustained rise in the general level of prices

A

Inflation

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8
Q

What are the four properties of money?

A

Durability
Potability
Divisibility
Uniformity

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9
Q

What are the three economic properties?

A

Stability of value
Scarcity
Acceptability

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10
Q

What are the three possible sources that money draws value from?

A

Commodity money
representative money
fiat money

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11
Q

___ money derives its values from the type of material from which it is composed

A

commodity

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12
Q

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

A

precious metals

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13
Q

___ is paper money back by something tangible-gold or silver-that gives it value

A

Representative

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14
Q

The earliest forms of representative money were seen in the ___

A

middle ages

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15
Q

___, ___, and ___ began issuing that promised to pay a certain amount of gold or silver

A

merchants
goldsmiths
moneylenders

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16
Q

___ money declared by the government and accepted by citizens to have worth

A

fiat money

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17
Q

The value of the U.S. dollar was linked to the value of ___ until 1971

A

gold

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18
Q

The ___ money, coins contain only a token amount of precious metal that is worth far less than the face value of those coins

A

fiat

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19
Q

A crucial role of the government in maintaining the value of fiat money is controlling its ___ in other words

A

supply

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20
Q

___ is paper money and coins

A

currency

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21
Q

Checking accounts are called ___

A

demand deposits

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22
Q

___ deposits because funds in the checking accounts can be converted into currency “on demand”

A

demand

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23
Q

___ money is saving accounts, and time deposits that can be converted into cash relatively easily

A

Near

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24
Q

Most demand deposits are ___ checking accounts that can be converted into currency simply by willing a check

A

non interest-bearing

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25
Q

___ checks are also considered demand deposits

A

travelers

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26
Q

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

A

Negotiable order of withdrawal (NOW)

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27
Q

What does NOW mean?

A

Negotiable order of withdrawal

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28
Q

___ money, such as savings accounts and other interest-bearing accounts, cannot be used directly to make transaction

A

near

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29
Q

___ are funds that people 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 (CD)

A

Time deposits

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30
Q

___ accounts 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

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31
Q

Economists a use various instruments to measure the money supply, but the most often cited are __ and ___

A

M1 and M2

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32
Q

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

A

M1 `

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33
Q

The elements of M1 are referred to as ___, which means that they are so can easily be come currency

A

liquid assets

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34
Q

___ is a border measure of the money supply, consisting of M1 plus various kinds of near money M2 include savings accounts, small-denomination time deposits, and money market mutual funds

A

M2

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35
Q

___ arose in Italy in the late Middle ages

A

Modern banking

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36
Q

Italian Merchants stared money or valuables for wealthy people and issued receipts that promised to return the properly on demand, this was the beginning of ___

A

fractional reserve banking

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37
Q

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

A

fractional reserve banking

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38
Q

A ___ bank is a bank chartered by a state government

A

state

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39
Q

___ was the secretary of treasury in 1789

A

Alexander HAmilton

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40
Q

Hamilton was a leading Federalist who believed in a strong ___ government

A

central

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41
Q

Hamilton argues that the Constitution implied that the federal government had the authority to create a ___ to carry out its duty to regulate currency

A

national bank

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42
Q

The First bank of the US was charted in ___

A

1791

43
Q

___ finally agreed to charter the Second bank of the UNited States in 1816

A

Congress

44
Q

President ___ was an outspoken critic who mistrusted banks with paper money

A

Andrew Jackson

45
Q

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

A

bank notes

46
Q

It was this practice, along with the questionable quality of many bank notes, that resulted in the term ___

A

wildcat bank

47
Q

The governments first solution to his problem was to issue a new currency backed by ___

A

government bonds

48
Q

The U.S. bank notes were called ___

A

greenbacks

49
Q

In 1863 congress passed the ___, which led to the certain of a system of national banks

A

National Banking Act

50
Q

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

A

U.S Treasury bonds

51
Q

In 1900, the government officially adopted the ___

A

gold standard

52
Q

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

A

gold standard

53
Q

In 1913 Congress passed the ___, which established the Federal Reserve System– a true central bank

A

Federal Reserve Act

54
Q

The Fed consists of ___ regional banks with ventral decision making board

A

12

55
Q

Part of FDR’s ___ was the Banking Act of 1933

A

New Deal program

56
Q

The ___ instituted reforms such as regulating interest rates that banks could pay and prohibiting banks from selling stock

A

Banking Act of 1933

57
Q

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

A

Federal Deposit Insurance Corporation

58
Q

The term, ___, is used to refer to almost any kind of financial institution that takes in deposits and makes loans, helping individuals, businesses, and governments to manage their money

A

bank

59
Q

The goal of a bank is to earn a ___

A

profit

60
Q

All financial institutions receive a ___ from the government, either state or federal

A

charter

61
Q

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

A

Privately owned commercial banks

62
Q

___ banks were initially established to provide loans to businesses

A

commercial

63
Q

Commercial banks provide basic banking services, ___ banks bought and sold assets through the financial markets

A

Investment

64
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

65
Q

The ___ insures all commercial banks based in the United States q

A

FDIC

66
Q

All nation commercial banks belong to the ___

A

Federal Reserve System

67
Q

___ associations began in the United States in the 1830s

A

Saving and Loan

68
Q

They were originally chartered by individual states as mutual societies for two purposes to take ___ and provide ___

A

saving deposits

home mortgage loans

69
Q

What insures S&Ls?

A

FSLIC

Federal Savings and Loan Insurance Corporations

70
Q

The first credit union in the United States began in 1909 as ___

A

state-chartered institutions

71
Q

The ___ created a system if federally chartered credit unions

A

Federal Credit Union Act of 1934

72
Q

Most credit unions have deposit insurace through the ___, on organization similar to the FDIC

A

NCUA

National Credit Union Association

73
Q

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

A

membership requirements

74
Q

___ are places where money can be bought and sold

A

banks

75
Q

By using banks, customers are able to do three things: what are they?

A

Store money
Earn money
Borrow money

76
Q

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

A

safe deposit box

77
Q

The most common loan a bank makes is a ___

A

mortgage

78
Q

How many years can a lender and borrower put on there agreed time on their loan?

A

30 years

79
Q

What acts as the collateral when a lender and a borrower makes an agreement on the time period they have for the loan?

A

Real estate property act

80
Q

If the borrower ___ the lender takes control of the property

A

defaults

81
Q

___ are issued by banks to users who are borrowers

A

credit cards

82
Q

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

A

Banking ACt of 1933

83
Q

The ___ lifted the last restriction from the Act of 1933 that had same products and competing with one another

A

Financial Service ACt of 1999

84
Q

Real estate prices ballooned, in part because of ___

A

lax lending standards

85
Q

A ___ is a contract that a corporation issues that promises to repay borrowed money, plus interest on a fixed schedule

A

bond

86
Q

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

A

electronic banking

87
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 officer

A

automated teller machines (ATM)

88
Q

A ___ represents money that the holder has on deposit with the issuer

A

stored-value card

89
Q

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

A

ATMs

90
Q

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

A

identification number (PIN)

91
Q

Debit cards are sometimes called ___

A

check cards

92
Q

Stored Value cards are sometimes called ___

A

prepaid cards

93
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

94
Q

___ is a crime i which one person fraudulently uses another’s identity to obtain credit or to access financial accounts

A

Identity Theft

95
Q

All the identity thief really needs is your what?

A

SSN

96
Q

What are the three major credit-reporting agencies

A

Experian, Equifax, and Trans-union

97
Q

___ is the measure of your dependability to repay a loan

A

Creditworthiness

98
Q

___ is a measure of your financial responsibility

A

Character

99
Q

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

A

Capacity

100
Q

___ is a measure of the value of things a consumer owns that could be sold or cashed in to repay a loan

A

Capital

101
Q

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

A

credit history

102
Q

A consumers___is the measure of a person’s creditworthiness

A

credit rolling

103
Q

___ is based off making payments on time , current debt, other credit history, recent applications for credit, and type of credit used

A

Credit Rating

Government (7 decks)

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