Economics Chapters 10 & 11

Front 1

____________ of currency means that it is easy to count and measure.

Back 1

Uniformity

Front 2

_____________ _____________ is interest paid on both principal and accumulated interest.

Back 2

compound interest

Front 3

The type of currency used in the United States today is _______ _________.

Back 3

fiat money

Front 4

Which type of bank provides the most services and plays the largest role in the economy?

Back 4

Commercial Bank

Front 5

Assets that have ________ are easy to turn into cash.

Back 5

liquidity

Front 6

That nation's first central bank was the _________ ___________ ___________.

Back 6

Federal Reserve System

Front 7

_____________ ____________ gets it value from the fact that it is always backed up by silver or gold.

Back 7

Representative money

Front 8

A ______ is an institution for receiving, keeping, and lending money.

Back 8

bank

Front 9

______ are computers that are used by customers to conduct their banking business.

Back 9

ATMs

Front 10

All of the following are examples of commodity money EXCEPT
a) an IOU
b) cotton
c) salt
d) precious stones

Back 10

A

Front 11

In case of a bank failure, customer deposits up to $200,000 per account are guaranteed by the _________ __________ _________ ___________.

Back 11

Federal Deposit Insurance Corporation

Front 12

All of the following are services provided by banks and other financial institutions EXCEPT
a) storing and saving money
b) paying interest
c) increasing the amount of money in circulation
d) providing mortgages

Back 12

C

Front 13

All of the following are characteristics of money EXCEPT
a) durability
b) uniformity
c) divisibility
d) accountability

Back 13

D

Front 14

All of the following are examples of a use of money EXCEPT a
a) medium of exchange
b) unit of account
c) store of value
d) means of barter

Back 14

D

Front 15

An example of a stored value card is a(n) __________ ________ _________.

Back 15

prepaid phone card

Front 16

The Free Banking Era between 1837 and 1863 was dominated by ________-___________ ______.

Back 16

state-chartered banks

Front 17

The National Banking Acts of 1863 and 1864 gave the federal government power to do all of the following EXCEPT
a) charter banks
b) require banks to hold gold and silver reserves to cover their bank notes
c) seize the assets of any individual
d) issue a single national currency

Back 17

C

Front 18

__________ __ __________ offer a guaranteed rate of interest over a certain period of time.

Back 18

Certificates of Deposit

Front 19

__________ _________ can only work in a simple economic system.

Back 19

commodity money

Front 20

All of the following are considered liquid assets EXCEPT
a) traveler's check
b) money market mutual funds
c) currency
d) deposits in checking accounts

Back 20

B

Front 21

____________ is the act of redirecting resources from being used today so they can create future benefits.

Back 21

Investment

Front 22

When the stock market falls over a period of time, it is known as a ________ ___________.

Back 22

bear market

Front 23

Markets in which money is lent for periods longer than one year are called ________ __________.

Back 23

capital markets

Front 24

The option to sell shares of stock at a specified time in the future is called a _____ _________.

Back 24

call option

Front 25

_________ ________ __________ _____________ are not covered by FDIC insurance.

Back 25

money market mutual funds

Front 26

A financial system brings together _______ and __________.

Back 26

savers, borrowers

Front 27

Corporate bonds have _________ ________.

Back 27

moderate risk

Front 28

The ________ on corporate bonds is taxed as ordinary income.

Back 28

interest

Front 29

All of the following are components of a bond EXCEPT
a) coupon rate
b) maturity
c) par value
d) call option

Back 29

D

Front 30

A bond's par value is generally repaid at __________.

Back 30

maturity

Front 31

Investors who sell stocks for less than they paid for them experience a _________ ______.

Back 31

capital loss

Front 32

____________ is high-risk investment with borrowed money in hope of big returns.

Back 32

speculation

Front 33

Which of the following is a reason for diversification?
a) to get the highest possible return
b) to get the most dividends
c) to eliminate risk
d) to reduce risk

Back 33

D

Front 34

Standard & Poor's and Moody's are firms that rate ______ and publish _________.

Back 34

bonds, ratings

Front 35

________ are loans.

Back 35

Bonds

Front 36

Which of the following bonds are issued by the United States government?
a) corporate bonds
b) savings bonds
c) junk bonds
d) municipal bonds

Back 36

B

Front 37

An investment report that is given to a potential investor is called a(n) ____________.

Back 37

prospectus

Front 38

When state and local governments need to finance improvements on highways, state buildings, or parks, they can raise funds by issuing _________ ______.

Back 38

municipal bonds

Front 39

The purpose of a financial intermediary is to help channel funds from ________ to __________.

Back 39

savers, borrowers

Front 40

Investors who buy _________ _________ are nonvoting owners of the company.

Back 40

preferred stock

Front 41

Name the three uses of money.

Back 41

a medium of exchange, a unit of account, store value

Front 42

Name the six characteristics of money.

Back 42

durability, divisibility, portability, uniformity, limited supply, acceptability