Banking and Money 2

What is money?

• accounts sold to household customers in small denominations along with a small booklet or computer statement showing the account's current balance.

• anything that serves as a medium of exchange, a unit of account, and a store of value.

• the price that you bear for buying things.

• the reduction of the value of an asset by prorating its cost over a period of years.

Getting interest on the original principal plus interest earned thoughout the loan period is called what?

• Simple interest

• Varied Interest

• Compound interest

• Common Interest

Two units of the same type of money must be the same in terms of what they will buy, that is, they must be

• divisible.

• portable.

• acceptable.

• uniform.

What is the source of fiat money’s value?

• it represents the value of another item

• government decree

• presidential pardon

• it is equal to the value of the stock market

This group was led by Hamilton who wanted a Central Bank

• Whigs

• Republicans

• Federalists

• Anti Federalists

The Banking Act of 1933 created what safety net for banking customers?

• 1st National Bank

• The Central Bank

• 2nd National Bank

• FDIC

The ability to be used as cash, or is easily converted into cash is called

• demand deposit

• money market

• amortization

• liquidity

A specific type of loan that is used to purchase real estate

• money market account

• demand deposit

• mortgage

• amortization

Cards entitling their holder to buy goods and services by borrowing money based on each holder's promise to pay.

• debit card

• credit card

• stored-value card

• traveler's check

What is the price paid for the use of borrowed money.

• principal

• interest

• mortgage

• tax