Chapter 10

Question 0

Which of the following is an example of money as a unit of account?

Answer 0

Checking the price of a camera at several store before buying it at the lowest price

Question 1

Which of the following is an example of a barter system?

Answer 1

Instead of paying rent, you clean house for your owner.

Question 2

Which of the following is the main disadvantage of using shells as money instead of coins?

Answer 2

Uniformity

Question 3

Which of the following is an example of of representative money?

Answer 3

An IOU note

Question 4

What is the purpose of the Federal Deposit Insurance Corporation (FDIC)?

Answer 4

To make sure that government has enough gold to cover its expanses

Question 5

What did the federalist believe about banking?

Answer 5

They believed that a centralized banking system was necessary

Question 6

What occurred during the free banking era

Answer 6

Currency varie widely from state to state

Question 7

What are “ greenbacks”

Answer 7

Commodity money used by the union during the civil war

Question 8

What is a mortgage used to purchase?

Answer 8

Real estate

Question 9

Why is using coins as money easier than using gold bars?

Answer 9

Coins are more portable

Question 10

What happens during a bank run?

Answer 10

More customers withdraw money than the bank has on hand

Question 11

What condition is necessary for a fiat money system to work?

Answer 11

The government must control the money supply

Question 12

What happens when you make a purchase using a credit card?

Answer 12

The credit card issuer pays the store.

Question 13

What is the larges source of income for blanks?

Answer 13

The interest hey receive from loans

Question 14

You need a new computer, and you will need a loan in order to buy one. Which lender is most likely to charge you the highest interest rate on your loan?

Answer 14

Finance company

Question 15

Near money includes

Answer 15

Deposits in savings accounts and money market mutual funds

Question 16

When you pay for a new cd with a debit card, you authorize the transfer of money from your account to the music stores account. In other words, a payment by debit card is the electron. Form of a payment by

Answer 16

Check

Question 17

Penny is an artist, and John a carpenter. Penny agrees to paint a portrait of John’s family in exchange for a handmade table created by John. How did Penny John pay for the goods in their transaction?

Answer 17

Through bartering

Question 18

Which of the following statement is true?

Answer 18

All of the above

Question 19

In the 1800’s, people in mining towns in the west often paid for goods with gold nuggets or gold dust. What was the function of gold?

Answer 19

It was used as currency

Question 20

In he 1990s, the Russian people list confidence in the value if the ruble, and many were no lonelier willing to sell goods and services in exchange die Russian currency. Which characteristic of money did the Russian currency lack?

Answer 20

Acceptability

Question 21

American leaders in the early United States wanted to establish a stable banking in order to

Answer 21

Promise international trade and economic growth

Question 22

What is the one reason why many people distrusted the banking system during the free banking era of the first half of the 1800s

Answer 22

Many banks did not have enough gold or silver to back the paper money they issued

Question 23

How did the United States government make the American public have confidence in he nations currency in the 1870s?

Answer 23

The government adopted a gold standard.

Question 24

You decide to open a savings account, and you notice a sign in your bank that indicates deposits are FDIC insured. What protection does this give you?

Answer 24

If the bank fail, your deposits protected up to $100,00.

Question 25

How did high interest rates affect savings and loans (S&Ls) in the 1980s?

Answer 25

S&Ls made money, because they earned high interest on loans they made throughout the 1980s.