Economy: Chapter 10
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Which is an example of a barter system? Instead of paying rent, you clean the house for the owner. Instead of paying cash for a computer, you use a credit card. Instead of paying the full amount for a car, you pay 10 percent in cash and pay for the rest in monthly installments. Instead of paying for a purchase in Mexico in pesos, you use dollars from the United States.
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Instead of paying rent, you clean the house for the owner.
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Which is an example of money as a unit of account? purchasing a toy for $8.99 lending a friend $25.00 opening a savings account at a bank checking the price of a camera at several stores before buying it at the lowest price
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checking the price of a camera at several stores before buying it at the lowest price
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Which is the main disadvantage of using shells as money instead of coins? durability portability uniformity divisibility
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uniformity
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What occurred during the Free Banking Era? Currency varied widely from state to state. Repaying of loans was not closely monitored. The Second Bank of the United States was established. The dollar bill was introduced.
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Currency varied widely from state to state.
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What were greenbacks? paper currency issued by the Confederacy during the Civil War paper currency issued by the Union during the Civil War fiat money used by the Confederacy during the Civil War commodity money used by the Union during the Civil War
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paper currency issued by the Union during the Civil War
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Which is not an example of a liquid asset? cash travelers' checks a certificate of deposit a checking account
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a certificate of deposit
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Why is using coins as money easier than using bars of gold? coins are more durable coins are more portable coins are more uniform coins are more limited in supply
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coins are more portable
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What happens during a bank run? The government orders a bank to close. States charter more banks than needed. The price of gold suddenly increases. More customers withdraw money than the bank has on hand.
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More customers withdraw money than the bank has on hand.
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The largest source of income for banks is . . . the interest received from loans fees charged to customers for accounts money deposited in savings accounts fees charged on credit cards
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the interest received from loans
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Which was not a cause of the Savings and Loan crisis of the 1980s? bad loans the gold reserve act high interest rates deregulation of the industry
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the gold reserve act
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Which is not an example of M1 money? currency a mutual fund travelers' checks a checking account
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a mutual fund
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Money that has value because the government has declared it legal tender to pay debts: currency commodity money representative money fiat money
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fiat money
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The central banking system of the United States: Federal Reserve National Bank of Washington D.C. Dow Jones Stock Exchange NASDAQ Exchange
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Federal Reserve
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Failure to pay back a loan: collude collateral default accelerate
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default
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Objects that have value in themselves and that are also used as money: currency commodity money representative money fiat money
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commodity money
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Coins and paper bills used as money: currency commodity money representative money fiat money
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currency
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A system that keeps only a portion of funds on hand and lends out the remainder: fractional reserve banking mortgage banking Ponzi scheme Federal Deposit Insurance Corporation (FDIC)
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fractional reserve banking
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The government agency that makes sure that customers' money is safe if a bank fails: Ponzi Depository FDIC Federal Reserve NASDAQ
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FDIC
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A specific type of loan that is used to buy real estate: mutual fund mortgage millage note deed bond
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mortgage
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The price paid for the use of borrowed money: Ponzi payment deed bond interest millage note
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interest
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Objects that have value because the holder can exchange them for something else of value: fiat money commodity money currency representative money
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representative money
