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Flashcards in Quiz 5 Deck (51)
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1

What does the Federal Reserve Bank and D.O.T do ?

Back your money

2

What does the bank protect ?

Theft
Us
Interest

3

What are travel checks ?

The bank accept your checks
A replacement for cash so you don't have to carry it

4

Checking

M1 money
Visa debt
Checks
Demand account
Liquid asset

5

Savings

M2 money
Higher interest
Take money out a minimum of 5 times month
Liquid asset (not as much, just thicker)

6

Why do you only take money out of your saving 5 times a month ?

Helps you save
Helps banks
Reserves required

7

Certification of Deposit (CD)

Pay higher rates
Frozen savings account
A savings account you can't touch

8

Can it be short or long term ?

Both

9

If you were to take out money before the end of your time, what would you have to pay ?

Penalties

10

What do most CD's do ?

Lock in interest rate

11

What is the number one way the bank make their money ?

Loans

12

Paper money

Fiat

13

Who issues the credit cards ?

The bank

14

What is a credit ?

Payments per cardholder agreement with interest
Merchant fees: 2 1/2-3%

15

What is a charge card ?

100% payed off each month
Annual fee: 4-5%
Example: Amex

16

What is a debt card ?

A card used to withdraw money from a bank account

17

What is a credit card ?

A card entitling its owner to buy goods and services based on the owner's promise to pay for those goods and services

18

Check fraud

Basically jail time

19

What is repossession ?

Default on loans
Example: default on your car loan, the bank can take the car

20

What is foreclosure ?

The seizure of property form the borrowers who repay their loans
Secure loans
Collateral

21

What is a collateral ?

Anything you put up to secure a loan
Example: a collateral for a house loan is your house

22

What would probably would qualify for loan/mortgage ?

Prequalified

23

What is a appraisal ?

Estimation of value

24

What is a principle ?

The amount of money borrowed

25

What is an interest ?

The price paid for the use of borrowed money

26

How much does the bank have of your money ?

Only a fraction of your money

27

Why wouldn't a business decrease in a recession ?

They are always in a business cycle

28

What is cash poor ?

Companies would become cash poor because of expansion

29

(Example from class)
Record year for a new shoe store ...... what could happen ?

Expand- more $$$
- more product
- more employees
- more infrastructure

30

Who is the #1 interest ?

Shareholders