Econ

Front 1

1. What is the definition of money? (12)-

Back 1

any legal tender that is accepted by most.

Front 2

2. What has served as money in the past? (12)-

Back 2

gold, silver, anything that was seen worth value.

Front 3

3. Name the three functions of money (12)-

Back 3

medium of exchange, union of account, store of value.

Front 4

4. What do we call it when we trade goods and services for other goods and services? (12)-

Back 4

bartering

Front 5

5. Name the five characteristics of money. (12)-

Back 5

stable in value, generally accepted, durable, divisible, portable

Front 6

6. Name the parts that make up M1? (12)-

Back 6

coins, cash, demand deposits, money orders, other check type money

Front 7

7. What does double coincidence of wants mean? (12)-

Back 7

When one person has what the other has for exchange what the other person wants.

Front 8

8. What do we call it when a substance must be accepted to pay all debts, public and private? (12)-

Back 8

legal tender.

Front 9

9. What are Federal Reserve Notes? (12)-

Back 9

1, 5, 10, 20, 50, 100 dollar bills

Front 10

10. What is fractional reserve banking? (12)-

Back 10

holding only a portion of a persons depository money

Front 11

11. What is the name we give checking accounts in banks? (12)-

Back 11

demand deposits

Front 12

12. What do we call things like time deposits and savings accounts? (12)-

Back 12

near money

Front 13

13. What causes a nation’s currency to gain or lose value against other countries’ currency? (12)-

Back 13

whether other countries have faith in a country’s economy, and stability of the government.

Front 14

14. What is the dual system of banking? (12)-

Back 14

federal and state governments may charter banks.

Front 15

15. What government corporation is responsible for insuring your deposits in a bank? (12)-

Back 15

FDIC(Federal deposit insurance incorporation)

Front 16

16. What are the three primary functions of depository institutions? (12)-

Back 16

safe keeping of money, making loans of money, creating more money

Front 17

17. What is the sub-prime mortgage crisis and what are the causes and consequences of this crisis? (12)-

Back 17

when you give a loan to a borrower to buy a house who has poor credit, interest rates lowered to 1% making it easier to borrow, foreclosure happens and debts were not being paid economy went into panic.

Front 18

18. What term do we use for the ease of turning assets into cash quickly without loss of value in terms of money? (12)-

Back 18

liquidation

Front 19

19. What is a nonprofit cooperative that provides banking services for its members called? (12)-

Back 19

credit union

Front 20

20. What does appreciation/depreciation of a nation’s currency mean? (12)-

Back 20

appreciation means dollar worth more, depreciation dollar is worth less.

Front 21

21. What is the impact of one country’s currency becoming worth less than another country? (12)-

Back 21

Goods become less in that country, good for consumers bad for trading, bad for the strength of the currency.

Front 22

22. What do we call it when a nation tries to lower the value of its currency and/or other actions by the government to make its goods cheaper in another nation than its own? (12)-

Back 22

dumping

Front 23

23. What is EFT? (12)-

Back 23

Electronic funds transfer (credit Card)

Front 24

24. What do we call the property a borrower puts up to guarantee his/her loan and the bank may take the property if the borrower does not repay the loan? (12)-

Back 24

Collateral

Front 25

25. What do we call it when a bank takes a home because the borrower did not make the payments? (12)-

Back 25

forclosure

Front 26

26. What are the differences between the three main types of loans issued by depository institutions? (12)-

Back 26

coupon loan-home equity loan, Secured loan-loan with collateral Fixed payment loan-pay a monthly payment to the bank

Front 27

27. What is a secured loan? (12)-

Back 27

loan with collateral

Front 28

28. What factors or variables determine the interest rate a bank or financial institution charges for a loan? (12)-

Back 28

cost of money to the bank, dependability of the borrower, paying back the loan, size and length of loan, banks willingness to make the loan.

Front 29

29. What do we call the money that a bank must keep on hand to back up deposits? (13)-

Back 29

required reserve

Front 30

30. What do we call the money that a bank has left after the money they must keep to back up deposits? (13)-

Back 30

excess reserves

Front 31

31. What are IOUs issued, or money borrowed, by the Fed on behalf of the United States Treasury called? (13)-

Back 31

government security or treasury bonds.

Front 32

32. Who are the money partners that ensure an ample supply of cash to the public? (13)-

Back 32

federal reserve, department of treasury

Front 33

33. What government agency serves as the nation’s central bank? (13)-

Back 33

federal reserve

Front 34

34. What is the nickname of the Federal Reserve System? (13)-

Back 34

the fed

Front 35

35. Name the Parts of the Federal Reserve System. (13)-

Back 35

board of governors, 12 federal reserve banks, Federal Open market committee.

Front 36

36. Which part of the Federal Reserve System is the governing body? (13)-

Back 36

Board of Governers

Front 37

37. What are the functions of the Federal Reserve System? (13)-

Back 37

to control the money supply, clearing inter bank payments, supervise banking, acts as the governments banker.

Front 38

38. What part of the Federal Reserve System is responsible for the buying and selling of government securities? (13)-

Back 38

Federal Open market committee.

Front 39

39. How many districts did the Federal Reserve Act divide the nation into? (13)-

Back 39

8-12

Front 40

40. Why are Federal Reserve Banks called ‘banker’s banks”? (13)-

Back 40

because commercial banks come to the federal banks.

Front 41

41. Which city is the main office of our Federal Reserve district located? (13)-

Back 41

Dallas

Front 42

42. What is the most important function that the Federal Reserve System serves? (13)-

Back 42

To control the money supply

Front 43

43. How does the banking system create more money, without printing more currency? (13)-

Back 43

fractional reserves that create loans

Front 44

44. What do we call actions taken by the Federal Reserve System to control the nation’s money supply as well as interest rates? (13)

Back 44

?

Front 45

45. What do we call it when the Federal Reserve System attempts to restrict available credit? (13)-

Back 45

tight money policy

Front 46

46. What do we call it when the Federal Reserve System attempts to expand the money supply (13)-

Back 46

easy money

Front 47

47. What are the three instruments that the Federal Reserve System can use to control the money supply? (13)-

Back 47

raise reserve requirments of a bank, open market operations, discount/federal funds rate.

Front 48

48. Which one of the three instruments is most effective and is most often used by the Federal Reserve System? (13)-

Back 48

open market operations

Front 49

49. What is the prime rate? (13)-

Back 49

best rate financial institutions charge there best customers

Front 50

50. What is the discount rate? (13)-

Back 50

the rate the fed charges members banks to borrow money

Front 51

51. What is the federal funds rate? (13)-

Back 51

the rate that two commercial charge each other.

Front 52

52. Which of the following is generally the highest, discount rate, prime rate, personal loan rate? (13)-

Back 52

personal loan rate

Front 53

53. What effect on the money supply will the Federal Reserve System selling government securities have? (13)-

Back 53

decrease or restrict money supply

Front 54

54. What school of economic thought believes control of the money supply is the key factor determining the economic health of the nation? (13)-

Back 54

monetarism(Milton freedman, keep the governemtn out of the ecnomy)

Front 55

55. Who is the key founder of the school of economic thought in the previous question? (13)-

Back 55

Milton Freedmon

Front 56

56. What three important areas of the economy are affected by changes in the cost and availability of loans? (13)-

Back 56

housing, automobiles, large appliances.

Front 57

57. What effect will an increase in reserve requirements have on the money supply? (13)-

Back 57

banks will hold on to more money meaning they will not lend as much

Front 58

58. Under what economic conditions should the Federal Reserve System restrict growth in the money supply? (13)-

Back 58

high inflation

Front 59

59. Under what economic conditions should the Federal Reserve System increase the growth of the money supply? (13)-

Back 59

low inflation, high unemployment, declining GEP

Front 60

60. What are real interest rates and what impact do they have on borrowing? (12 & 13)-

Back 60

what the market is charging at the moment plus inflation, when real interest rates are high then there is less borrowing.