Money Money Money Flashcards
1
Q
___ is anything that people will accept as payment for goods and services
A
money
2
Q
A ___ is a means through which goods and services can be exchanged
A
medium of exchange
3
Q
___ is the exchange of goods and services without using money
A
barter
4
Q
A ___ determines the economic worth in the exchange process
A
standard of value
5
Q
A ___ is something that holds its value over time
A
store of value
6
Q
One situation where money does not function well as a store of value is when the economy experiences significant ___
A
inflation
7
Q
___ is a sustained rise in the general level of prices
A
Inflation
8
Q
What are the four properties of money?
A
Durability
Potability
Divisibility
Uniformity
9
Q
What are the three economic properties?
A
Stability of value
Scarcity
Acceptability
10
Q
What are the three possible sources that money draws value from?
A
Commodity money
representative money
fiat money
11
Q
___ money derives its values from the type of material from which it is composed
A
commodity
12
Q
The most common form of commodity money throughout history has been coins made from ___
A
precious metals
13
Q
___ is paper money back by something tangible-gold or silver-that gives it value
A
Representative
14
Q
The earliest forms of representative money were seen in the ___
A
middle ages
15
Q
___, ___, and ___ began issuing that promised to pay a certain amount of gold or silver
A
merchants
goldsmiths
moneylenders
16
Q
___ money declared by the government and accepted by citizens to have worth
A
fiat money
17
Q
The value of the U.S. dollar was linked to the value of ___ until 1971
A
gold
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
19
Q
A crucial role of the government in maintaining the value of fiat money is controlling its ___ in other words
A
supply
20
Q
___ is paper money and coins
A
currency
21
Q
Checking accounts are called ___
A
demand deposits
22
Q
___ deposits because funds in the checking accounts can be converted into currency “on demand”
A
demand
23
Q
___ money is saving accounts, and time deposits that can be converted into cash relatively easily
A
Near
24
Q
Most demand deposits are ___ checking accounts that can be converted into currency simply by willing a check
A
non interest-bearing
25
___ checks are also considered demand deposits
travelers
26
___ accounts, are interest-bearing savings accounts against which drafts may be written
Negotiable order of withdrawal (NOW)
27
What does NOW mean?
Negotiable order of withdrawal
28
___ money, such as savings accounts and other interest-bearing accounts, cannot be used directly to make transaction
near
29
___ 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)
Time deposits
30
___ 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
Money market accounts
31
Economists a use various instruments to measure the money supply, but the most often cited are __ and ___
M1 and M2
32
___ is the narrowest measure of money supply, consisting of currency, demand deposits and other checkable deposits
M1 `
33
The elements of M1 are referred to as ___, which means that they are so can easily be come currency
liquid assets
34
___ 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
M2
35
___ arose in Italy in the late Middle ages
Modern banking
36
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 ___
fractional reserve banking
37
___is the practice of holding only a fraction of the money deposited in a bank and lending the rest
fractional reserve banking
38
A ___ bank is a bank chartered by a state government
state
39
___ was the secretary of treasury in 1789
Alexander HAmilton
40
Hamilton was a leading Federalist who believed in a strong ___ government
central
41
Hamilton argues that the Constitution implied that the federal government had the authority to create a ___ to carry out its duty to regulate currency
national bank
42
The First bank of the US was charted in ___
1791
43
___ finally agreed to charter the Second bank of the UNited States in 1816
Congress
44
President ___ was an outspoken critic who mistrusted banks with paper money
Andrew Jackson
45
During this period, all banks were state banks, each of which issued its own paper currency, called ___
bank notes
46
It was this practice, along with the questionable quality of many bank notes, that resulted in the term ___
wildcat bank
47
The governments first solution to his problem was to issue a new currency backed by ___
government bonds
48
The U.S. bank notes were called ___
greenbacks
49
In 1863 congress passed the ___, which led to the certain of a system of national banks
National Banking Act
50
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
U.S Treasury bonds
51
In 1900, the government officially adopted the ___
gold standard
52
The ___ is a system that backs the basic monetary unit with a set amount of gold
gold standard
53
In 1913 Congress passed the ___, which established the Federal Reserve System-- a true central bank
Federal Reserve Act
54
The Fed consists of ___ regional banks with ventral decision making board
12
55
Part of FDR's ___ was the Banking Act of 1933
New Deal program
56
The ___ instituted reforms such as regulating interest rates that banks could pay and prohibiting banks from selling stock
Banking Act of 1933
57
The ___ provided federal insurance so that if a bank failed, people would no longer lose their money
Federal Deposit Insurance Corporation
58
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
bank
59
The goal of a bank is to earn a ___
profit
60
All financial institutions receive a ___ from the government, either state or federal
charter
61
___ are the oldest form of banking and are the financial institutions most commonly thought of as banks
Privately owned commercial banks
62
___ banks were initially established to provide loans to businesses
commercial
63
Commercial banks provide basic banking services, ___ banks bought and sold assets through the financial markets
Investment
64
___ 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
deregulation
65
The ___ insures all commercial banks based in the United States q
FDIC
66
All nation commercial banks belong to the ___
Federal Reserve System
67
___ associations began in the United States in the 1830s
Saving and Loan
68
They were originally chartered by individual states as mutual societies for two purposes to take ___ and provide ___
saving deposits
| home mortgage loans
69
What insures S&Ls?
FSLIC
| Federal Savings and Loan Insurance Corporations
70
The first credit union in the United States began in 1909 as ___
state-chartered institutions
71
The ___ created a system if federally chartered credit unions
Federal Credit Union Act of 1934
72
Most credit unions have deposit insurace through the ___, on organization similar to the FDIC
NCUA
| National Credit Union Association
73
The major difference between credit unions and other financial institutions is that credit unions have ___
membership requirements
74
___ are places where money can be bought and sold
banks
75
By using banks, customers are able to do three things: what are they?
Store money
Earn money
Borrow money
76
You can store important papers and valuables through the use of a ___
safe deposit box
77
The most common loan a bank makes is a ___
mortgage
78
How many years can a lender and borrower put on there agreed time on their loan?
30 years
79
What acts as the collateral when a lender and a borrower makes an agreement on the time period they have for the loan?
Real estate property act
80
If the borrower ___ the lender takes control of the property
defaults
81
___ are issued by banks to users who are borrowers
credit cards
82
The ___ tightly regulated the amount of interest that banks could pay on deposits and could charge on loans
Banking ACt of 1933
83
The ___ lifted the last restriction from the Act of 1933 that had same products and competing with one another
Financial Service ACt of 1999
84
Real estate prices ballooned, in part because of ___
lax lending standards
85
A ___ is a contract that a corporation issues that promises to repay borrowed money, plus interest on a fixed schedule
bond
86
Technology, particularly computer technology, has changed the way customers use banks, producing a system generally referred to as ___
electronic banking
87
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
automated teller machines (ATM)
88
A ___ represents money that the holder has on deposit with the issuer
stored-value card
89
___ are the oldest and most familiar of the developments in electronic banking
ATMs
90
In order to use one you must have a personal ___ for your ATM/Debit card
identification number (PIN)
91
Debit cards are sometimes called ___
check cards
92
Stored Value cards are sometimes called ___
prepaid cards
93
___ allows customers who have set up accounts with a bank to perform practically every transaction without setting foot in a bank
Electronic banking
94
___ is a crime i which one person fraudulently uses another's identity to obtain credit or to access financial accounts
Identity Theft
95
All the identity thief really needs is your what?
SSN
96
What are the three major credit-reporting agencies
Experian, Equifax, and Trans-union
97
___ is the measure of your dependability to repay a loan
Creditworthiness
98
___ is a measure of your financial responsibility
Character
99
___ is a measure of a consumer's ability to repay a debt on time
Capacity
100
___ is a measure of the value of things a consumer owns that could be sold or cashed in to repay a loan
Capital
101
A persons record of paying bills and debts over time is one's ___
credit history
102
A consumers___is the measure of a person's creditworthiness
credit rolling
103
___ is based off making payments on time , current debt, other credit history, recent applications for credit, and type of credit used
Credit Rating
