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Economics > Quiz 5 > Flashcards

Quiz 5 Flashcards

1
Q

What does the Federal Reserve Bank and D.O.T do ?

A

Back your money

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2
Q

What does the bank protect ?

A

Theft
Us
Interest

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3
Q

What are travel checks ?

A

The bank accept your checks

A replacement for cash so you don’t have to carry it

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4
Q

Checking

A 
M1 money 
Visa debt 
Checks 
Demand account 
Liquid asset
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5
Q

Savings

A

M2 money
Higher interest
Take money out a minimum of 5 times month
Liquid asset (not as much, just thicker)

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6
Q

Why do you only take money out of your saving 5 times a month ?

A

Helps you save
Helps banks
Reserves required

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7
Q

Certification of Deposit (CD)

A

Pay higher rates
Frozen savings account
A savings account you can’t touch

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8
Q

Can it be short or long term ?

A

Both

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9
Q

If you were to take out money before the end of your time, what would you have to pay ?

A

Penalties

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10
Q

What do most CD’s do ?

A

Lock in interest rate

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11
Q

What is the number one way the bank make their money ?

A

Loans

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12
Q

Paper money

A

Fiat

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13
Q

Who issues the credit cards ?

A

The bank

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14
Q

What is a credit ?

A

Payments per cardholder agreement with interest

Merchant fees: 2 1/2-3%

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15
Q

What is a charge card ?

A

100% payed off each month
Annual fee: 4-5%
Example: Amex

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16
Q

What is a debt card ?

A

A card used to withdraw money from a bank account

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17
Q

What is a credit card ?

A

A card entitling its owner to buy goods and services based on the owner’s promise to pay for those goods and services

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18
Q

Check fraud

A

Basically jail time

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19
Q

What is repossession ?

A

Default on loans

Example: default on your car loan, the bank can take the car

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20
Q

What is foreclosure ?

A

The seizure of property form the borrowers who repay their loans
Secure loans
Collateral

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21
Q

What is a collateral ?

A

Anything you put up to secure a loan

Example: a collateral for a house loan is your house

22
Q

What would probably would qualify for loan/mortgage ?

A

Prequalified

23
Q

What is a appraisal ?

A

Estimation of value

24
Q

What is a principle ?

A

The amount of money borrowed

25
Q

What is an interest ?

A

The price paid for the use of borrowed money

26
Q

How much does the bank have of your money ?

A

Only a fraction of your money

27
Q

Why wouldn’t a business decrease in a recession ?

A

They are always in a business cycle

28
Q

What is cash poor ?

A

Companies would become cash poor because of expansion

29
Q

(Example from class)

Record year for a new shoe store …… what could happen ?

A

Expand- more $$$

  • more product
  • more employees
  • more infrastructure
30
Q

Who is the #1 interest ?

A

Shareholders

31
Q

What are shareholders ?

A

People who own stock

32
Q

What happens if companies keep expanding ?

A

The greater the risk

33
Q

What is Cash is King ?

A

Expression sometimes used in analyzing businesses or investments portfolios
Example: A house is selling at $300,000, someone offers to pay the full 300,00 next week but someone else has the a check ready but for $275,000 ….. you take the $275,000

34
Q

An institution for receiving, keeping, and lending money

A

Bank

35
Q

A widespread panic in which many people try to redeem their paper money at the same time

A

Bank run

36
Q

The direct exchange of one set of goods or services for another

A

Barter

37
Q

A bank that can lend to other banks in time of need

A

Central bank

38
Q

A person or institution to whom money is owed

A

Creditor

39
Q

Coins and paper bills used as money

A

Currency

40
Q

Failing to pay back loans

A

Default

41
Q

Money in a checking account that can be paid out “on demand” or at any time

A

Demand deposit

42
Q

Objects that have value because a government has decreased that they are an acceptable means to pay debts

A

Fiat money

43
Q

A banking system that keeps only a fraction of its funds on hand and lends out the remainder

A

Fractional reserve banking

44
Q

A monetary sytem in which paper money and coins had the value of certain amounts of gold

A

Gold standard

45
Q

A paper currency issued during the civil war

slag for cash

A

Greenback

46
Q

The ability to be used as, or directly converted into, cash

A

Liquidity

47
Q

A bank that belongs to the Federal Reserve System

A

Member bank

48
Q

Anything that serves as a medium of exchange, a unit of account, and a store of value

A

Money

49
Q

All the money available in the United States economy

A

Money supply

50
Q

A specific type of loan that is used to buy real estate

A

Mortgage

51
Q

A bank charted by the federal government

A

National Bank

Economics (10 decks)

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