Chapter 10 Flashcards
(25 cards)
Which of the following is an example of money as a unit of account
Checking the price of a camera at several stores before buying it at the lowest price
Which of the following is an example of a barter system
Instead of paying rent you clean the house for the owner
Which of the following is the main disadvantage of using shells as money instead of coins
Uniformity
Which of the following is an example of representative money
An IOU note
What is the purpose of the Federal deposit insurance Corporation
To make sure that customers do not lose money at the bank fails
What did the Federalist believe about banking
They believe that a centralized banking system was necessary
What occurred during the free banking era
Currency varied widely from state to state
What were “greenbacks”
Commodity money used by the union during the civil war
What is a mortgage used to purchase
Real estate
Why is using coins as money easier than using gold bars
Coins are more portable
What happens during a bank run
More customers withdraw money than what the bank has on hand
What condition is necessary for a Fiat money system to work
The government must control the money supply
What happens when you make a purchase using a credit card
The credit card issuer pays the store
What is the largest source of income for banks
The interest they receive from loans
You need a new computer and will need a loan in order to buy one which lender is most likely to charge you the highest interest rate on your loan
Finance company
Near money includes
Deposits in saving accounts and money market mutual funds
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 another word a payment by debit card is the electronic form of a payment by
Check
Shelby is an artist and John is a Carpenter Shelby agrees to paint a portrait of John’s family in exchange for a handmade table created by John how did Shelby and John pay for the goods in their transaction
By bartering
Which statement is true
Money is a medium of exchange,unit of account ,and serves as a store of value
In the 1800s people in mining towns in the west often paid for goods with gold nuggets or Golddust what was the function of gold
It was used as a currency
In the 1990s the Russian people lost confidence in their value of the rubble and many were no longer willing to sell goods and services in exchange for rushing currency what characteristic of money did the Russian currency lack
Acceptability
American leaders in the early US wanted to establish a stable banking system in order to
Promote international trade and economic growth
What is one reason why many people distrusted the banking system during the free banking era of the first half of the 1800s
Many banks did not have enough gold or silver to back the paper money they issued
How did the United States government make the American public have confidence in their nations currency in the 1870s
They adopted the gold standard
