Test 4 Flashcards
How does value of goods change over time?
The present value of future goods is always discounted in comparison with the immediate value of the same goods.
What is the spread in banking?
The difference between the interest payed by the borrower and the interest payed by the depositer.
What did the Bible say about interest?
The Old Testament forbade interest for poor folks.
Who will God reward?
The zero interest lender.
Does an item have use if it is physically useless to the user?
No, it can still be economically useful.
What does inflation cause?
An economic boom.
What causes the cycle of boom and bust?
Fractiona reserve banking.
What does Jesus support in his monetary parables?
He supports both trade and interest-seeking.
What is Usury?
The securing of interest from a charitable loan.
What is the banker in any transaction?
An evaluator of risk.
What is Honest Banking?
The profitable exchange of information.
What happens to the depositer in honest banking?
They give up the use of the money in exchange for guaranteed interest.
Who are most loans made to?
People with collateral.
What is Multiple Indebtedness?
Taking out multiple loans with singular collateral.
What occurs in fractional reserve banking?
The bank gives out more “receipts” than it has.
