FDIC Banking Terms 1

What does the acronym FDIC stand for?

• Federal Deposit Insurance Corporation

• Federal Deposit Interest Committee

• Financial Division Insurance Corporation

• Federal Department of Investment and Commerce

How much does the FDIC insure for each depositor in a bank?

• $100,000

• $250,000

• $500,000

• $1,000,000

What does the rate at which the price of goods increases and consumer purchasing power decreases over time refer to?

• Economic growth

• Inflation

• Deflation

• Stagflation

What is one cause of inflation according to the text?

• Decrease in the economy's money supply

• Growth in the economy's money supply

• Increase in the economy's interest rates

• Decrease in investment spending

What is the maximum amount insured by the National Credit Union Administration for deposits in U.S. credit unions per individual depositor?

• A) $100,000

• B) $200,000

• C) $250,000

• D) $500,000

What is interest?

• A tax paid to the government for earning money.

• A fee paid to you for keeping your money in an account or charged to you for a loan or credit card.

• A one-time payment for opening a bank account.

• A reward given by companies for purchasing their products.

How is compound interest calculated?

• On the principal only

• On the accumulated interest only

• On the principal plus the accumulated interest

• On the principal minus the accumulated interest

What type of account at a bank or credit union allows the user to make multiple transactions including debiting or crediting the account?

• Savings account

• Transactional account

• Loan account

• Fixed deposit account

What is the primary function of the Federal Reserve System?

• A) To regulate the stock market

• B) To manage the national debt

• C) To control the nation's monetary policy

• D) To oversee the banking industry

What is the term for a sudden, rapid increase in the inflation rate?

• A) Hyperinflation

• B) Stagflation

• C) Deflation

• D) Reflation