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50 Cards in this Set
- Front
- Back
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Anything that serves as a medium of exchange, a unit of account and a store of value
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Money
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Anything that is used to determine the vlaue during the exchange of goods and services
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medium of exchange
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Three uses of money:
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medium of exchange
unit of account store of value |
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A means of comparing the values of goods and services
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unit of account
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Something that keeps its value if it is stored rather than used
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store of value
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Money keeps its value if you hold on to it for later. This is an example of _______
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store of value
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Six characteristics of money
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Do u like a pretty day
uniformity limited supply acceptability durability portability divisivility |
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Objects that have value as themselves and can also be used as money
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commodity
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What is an example of a commodity
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salt, cattle, precious stones, corn, oil
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An object that has value because it can be exchanged for something else of value
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representative money
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Give an example of representative money
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checks, debit cards, gold receipt
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Money that has value because the government has ordered that it is an acceptable means to pay debts
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fiat money
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Give an example of fiat money
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American money
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What are three sources of money
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commodity money
representative money fiat money |
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The National Banking Acts of 1863 and 1864 gave the federal government the poer to :
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-charter banks
-require banks to hold adequate reserves of silver and gold -issue a single national currancy |
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2 advantages of the Gold Standard
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1. It set a definate value for the dollar
2. The government could only issue money if it had gold to back it. |
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What act established the federal reserve system (also called the FED)
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Federal Reserve Act of 1913
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What act established the government agency that insures customer deposits if the bank fails
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FDIC Federal Deposit Insurance Corporation
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Money that can be accessed easily and can be used to pay for goods and services
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M1 Money
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Are checking accounts M1 or M2 money
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M1
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Money that consists of all M1 money plus savings accounts and mutual funds
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M2 money
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M2 money is all called
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near money
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_____ money can not be used as cash directly.
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M2 money
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What are the 5 banking services
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Storing money
credit cards saving money loans mortgages |
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Alexander Hamilton was a _____
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Federalists
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Thomas Jefferson was a ______
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Antifederalist
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________believed that a centralized banking system was necessary for the US
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Federalist
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______ favored leaving most powers in the hands of the states
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Antifederalist
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______ brought stability to American Banking. Antifederalist thought that it was unconstitutional. After Hamilton was killed, it lost its biggest backer and charter
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1st bank of the US
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After the 1st Bank of US lost its charter, ____ broke out because states issued notes they could not back with gold. The people lost confidence in the system
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Chaos
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To solve the chaos, the ______ was established. Biddle performed surprise inspections to build confidence in system.
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2nd Bank of the US
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What caused the fall of the 2nd Bank
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Andrew Jackson would not renew the charter
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The period after the 2nd Bank is known as the ______ or ______
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Free Banking Era
Wildcat Era |
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Problems with the Free Banking Era included:
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Bank runs and panics
Wildcat banks Fraud Too many different currencies |
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Banks _____ _____ in fireproof vaults and insure it against loss.
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store money
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People can put money in ______, _____, ______ and ______ to earn interest in the bank
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savings accounts
checking accounts money markets CD's |
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By ______ _______, banks help new businesses get started and grow
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lending money
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A ______ is a specific type of loan that is used to buy real estate.
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mortgage
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_____ ______ allow people to buy goods or services based on a promise to pay back.
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credit cards
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Money enters a bank how?
1 2 3 |
Deposits from customers
Interest from Borrowers Fees for sevices |
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List 3 ways money leaves a bank
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Interest and withdrawals to customer
Loans to borrowers Bank's expense of doing business |
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What are the 5 types of Financial Institutions
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Commercial banks
Savings and Loan Associations Savings Banks Credit Unions Finance Companies |
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_____ offers checking accounts, accepts deposits, and makes loans. They traditionally offer services to businesses
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Commercial Banks
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_____ was originally set up to lend money for building homes
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Savings and Loans
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_____ served people who made smaller deposits. They created NOW accounts that were checking accounts that paid interest.
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Savings Banks
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_____ served people from a specific company or government agency. They specialized in mortgage and car loans
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Credit Unions
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_____ make installment loans to customers and usually charge higher interest rates
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Finance Companies
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___ are computers that companies can use to deposit money, withdraw cash and obtain account information at convenient locations
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ATM
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____ can be used to withdraw money from checking or savings accounts
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debit cards
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_____ is the process of being able to access information from financial instutions over the internet
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home banking
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