unit 3 Money and Banking part 1

Multiple Choice

Which of the following is NOT a function of money as described in the evolution of money?

• Medium of exchange

• Measure of value

• Store of value

• Source of income

Multiple Choice

Why is the concept of money significant in shaping societies and economies throughout history?

• Money serves only as a means to collect taxes and fees.
• Money is significant solely for personal savings and investments.
• Money is only a physical object with no real value.
• Money is significant because it facilitates trade, provides a unit of account, and acts as a store of value, shaping economies and societies.

Multiple Choice

Which of the following is NOT a characteristic of money as described in the lesson?

• Portability

• Durability

• Divisibility

• Inflation

Multiple Choice

Explain how the development of currency in America changed from the Revolutionary War to the introduction of Treasury coin notes in 1890.

• The introduction of paper money was delayed until the Civil War era.
• The development of currency in America evolved from the depreciated 'Continentals' during the Revolutionary War to the establishment of a unified currency system with Treasury coin notes in 1890.
• Currency remained stagnant with no significant changes until 1900.
• The use of gold and silver coins dominated throughout the Revolutionary War.

Fill in the Blank

The United States has been on the ___ fiat money standard since 1934.

Multiple Select

Which of the following are advantages of the gold standard?

• People feel more secured

• Prevents government from printing too much money

• Gold stock grows fast enough for any economy

• Price of gold never changes

Multiple Choice

Describe the impact of the Great Depression on the banking system and how the government responded to the crisis.

• The Great Depression led to increased bank profits and stability, with no significant government intervention.
• Banks thrived during the Great Depression, resulting in minimal changes to financial regulations.
• The government ignored the banking crisis, allowing banks to operate without any oversight.
• The Great Depression caused bank failures and a loss of public confidence in the banking system, prompting government reforms like the Emergency Banking Act and the creation of the FDIC.

Match

Match the following

• When banks hold a portion of deposits to cover potential withdrawals and then loans the rest of the money out.

• Money deposited in a commercial bank in a checking account.

• The percent that banks must hold by law.

• The amount that the bank can loan out.

• A record of a bank’s assets, liabilities, and net worth.

Fractional Reserve Banking

Demand Deposits

Required Reserves

Excess Reserves

Balance Sheet

• Fractional Reserve Banking

• Demand Deposits

• Required Reserves

• Excess Reserves

• Balance Sheet

Fill in the Blank

The Federal Deposit Insurance Corporation (FDIC) was created to ___ customer deposits in the event of a bank failure.

Multiple Choice

What is the importance of Credit Unions?

• Credit unions charge high fees and interest rates.
• Credit unions provide affordable financial services, promote savings, and support community development.
• Credit unions focus solely on profit maximization.
• Credit unions are only for large corporations.