8 Money and Banking Part 1

Money functions as a

• medium of exchange
• standard of value
• store of value
• pizza

An entrepreneur who needs financial help in buying new equipment for her business might take out a

• commercial loan
• mortgage loan
• certificate of deposit
• consumer loan

In the intro to chapter 8 the guy started with a ____ and ended up with a_____.

• paper clip, house
• house, paper clip
• 1000 dollars, and some hot Cheetos

What is a barter?

• i don't know
• exchange of stuff for goods or services
• nothing
• a system of money in general use in a particular country

What is a bank's main function?

• to protect the nation's financial status
• to serve as a financial intermediary between savers and borrowers
• to issue Federal Reserve notes, (paper currency)
• to make sure consumers save enough money for retirement

The system in which banks keep a portion of deposits in reserve and make loans with the rest is known as

• fractional reserve banking
• the barter method
• 401(k) retirement plans.
• The Federal Reserve

Which of these IS an example of an "emergency" expense?

• Phone Upgrade
• A bigger/nicer apartment for yourself
• Disneyland Annual Pass
• a functioning car after an accident

Which economic goals are emphasized in a modern command economy?

• security and equity
• economic efficiency and freedom
• economic stability and growth

It is more expensive to be poor for all of the following reasons EXCEPT...

• no grocery stores/unbanked
• pay day lenders/check cashing places decision fatigue
• bank fees over draft, low balance etc.
• lower credit score gets people a lower interest rate

The stock market is guaranteed to make you rich.

• True
• False