Unit 4 Test Review

Question 1

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

Answer 1

money

Question 2

anything that is used to determine value during the exchange of goods and services

Answer 2

medium of exchange

Question 3

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

Answer 3

barter

Question 4

a means for comparing the values of goods and service

Answer 4

unit of account

Question 5

coins and paper bills used as money

Answer 5

currency

Question 6

Three Uses of Money

Answer 6

medium of exchange
unit of account
store of value

Question 7

Six Characteristics of Money

Answer 7

Durability
Portability
Divisibility
Uniformity
Limited Supply
Acceptability

Question 8

objects that have value in themselves and that are also used as money

Answer 8

commodity money

Question 9

objects that have value because the holder can exchange them for something else of value

Answer 9

representative money

Question 10

money that has value because the government has ordered that it is an acceptable means to pay debts

Answer 10

fiat money

Question 11

Three Sources of Money’s Value

Answer 11

commodity money
representative money
fiat money

Question 12

an institution for receiving, keeping, and lending money

Answer 12

bank

Question 13

a bank chartered, or licensed by the national government

Answer 13

national bank

Question 14

widespread panic in which great numbers of people try to redeem their paper money

Answer 14

bank run

Question 15

Four problems that arose as a result of the Free Banking Era

Answer 15

bank runs
wildcat banks
fraud
many different currencies

Question 16

paper currency issued during the Civil War

Answer 16

greenback

Question 17

a monetary system in which paper money and coins are equal to the value of a certain amount of gold

Answer 17

gold standard

Question 18

the nation’s central banking system

Answer 18

Federal Reserve System

Question 19

bank that can lend to other banks in times of need

Answer 19

central bank

Question 20

bank that belongs to the Federal Reserve System

Answer 20

member bank

Question 21

the national currency we use today in the United States

Answer 21

Federal Reserve note

Question 22

the severe economic decline that began in 1929 and lasted for more than a decade

Answer 22

Great Depression

Question 23

the government agency that insures customer deposits if a bank fails

Answer 23

Federal Deposit Insurance Corporation

Question 24

Causes of the Savings and Loan Crisis

Answer 24

Deregulation
High interest rates
Bad loans
Fraud

Question 25

all the money available in the United States economy

Answer 25

money supply

Question 26

the ability to be used as, or directly converted to, cash

Answer 26

liquidity

Question 27

the money in checking accounts

Answer 27

demand deposit