Financial Institutions

What are the two types of money, and what is the difference between them?

Which of the following is NOT one of the functions of money?

• Medium of Exchange

• Unit of Account

• Price Stabilization

• Store of Value

_____ is the total quantity of money in the economy at any one time.

• Currency

• Money Supply

• Fiat

• Commodity

_____ describes how easily an asset can be converted into currency.

• Smelliness

• Stickiness

• Hotness

• Liquidity

Who decides what is counted as money

and also measures and regulates the country’s money supply?

• Congress

• The Federal Reserve

• The President

• Mrs. Gandy

A ____ is a financial intermediary that accepts deposits, makes loans, and offers checking accounts.

• bank

• payday lender

• federal reserve

• brokerage firm

Banks earn _____ on their loans, and with that money they pay _____ to their depositors, cover their own operating costs, and earn a profit. (Same word for both blanks.)

Match the following

• things of value

• net worth

• assets - (minus) liabilities

• assets

• obligations (debts) to other parties

• liabilities

The _____ system means that the bank keeps less currency on hand than the total sum of amounts of account-holders.

• fractional reserve

• fiat

• federal reserve

• commodity

Banks require customers' _____ to function. If customers lose this, they are likely to try to withdraw their funds, which could cause the bank to fail.

• swagger

• confidence

• prayers