Money & Financial Institutions

What are the THREE functions of money?

• Medium of exchange

• Store of value

• Measure of value

• Determines price of a good or service

What happens to the purchasing power of money when inflation occurs?

• Remains the same

• Increases

• Decreases

• Inflation is a government conspiracy

Check THREE financial institutions where you can store or invest money.

• Security Brokerages

• Banks

• Fireproof Boxes

• Savings and Loans

• The Black Market

Which is true about credit unions?

• Open to all citizens

• Must be a member of a sponsoring group

• Work as a for-profit institution

• None exist in United States

Check the TWO main reasons people store money in a private financial institution.

• More secure

• More inflation

• For the swag

• Earn more money through interest

What do banks do with your money when you're not using it?

• Loan it to other banks

• Loan it to businesses or other customers

• Watch it until you come back for it

• Give it to the needy

How does a bank, which is a for-profit business, make money?

• Charging interest on loans

• Charging fees to enter bank

• Increasing the purchasing power of money

• Banks are not-for-profit institutions

What are Savings and Loans commonly used for?

• Smaller purchases (buying food, etc.)

• Middle man for money transactions

• Government's bank

• Larger purchases (buying homes, etc.)

What is a benefit of joining a credit union?

• Offer loans at higher interest rates

• Do not need to qualify for loans

• Lower costs of opening accounts and borrowing money

• Are not required to be part of a sponsoring group

Which private financial institution provides investors with information about buying stocks, bonds, and commodities?

• Banks

• Savings and Loans

• Credit Unions

• Securities Brockerages