Economics Quiz

What is the US dollar an example of?

• Commodity money

• Cryptocurrency

• Fiat money

• Bond

What does it mean when the US dollar is described as legal tender?

• It is backed by a physical commodity

• It must be accepted as payment

• It is the most valuable currency

• It can only be used within the US

What is liquidity?

• The ability to draw money from the bank

• The ease of converting something to cash

• The amount of money in a savings account

• The legal tender status of a currency

What does the Federal Deposit Insurance Corporation (FDIC) insure?

• Every bank account up to $100,000

• Every bank account up to $250,000

• Every bank loan up to $250,000

• Every personal check up to $250,000

What can happen if you write a personal check without having enough money in your account?

• The check will be processed as usual

• The check will earn interest

• The check will bounce due to insufficient funds

• The check will be backed by the FDIC

What is OVERDRAFT protection?

• A service where the bank charges a fee for transactions that exceed the account balance.

• A service where the bank automatically pays bills that are due.

• A service where the bank will pay a check or honor a debit card transaction even if there's not enough money in the account.

• A service where the bank prevents you from writing checks that exceed your account balance.

What is the purpose of setting up AUTO PAYMENT from your checking account?

• To avoid late fees by ensuring bills are paid on time.

• To reduce the amount of money in your checking account.

• To increase the fees charged by the bank.

• To stop payments on checks you have written.

What can you request from your bank to prevent someone from cashing a check you wrote?

• OVERDRAFT protection.

• AUTO PAYMENT setup.

• STOP PAYMENT.

• TIME TO CLEAR.

What does it mean for a check to CLEAR?

• The bank has confirmed the check is valid and not a fraud.

• The time between when you write the check and when the money is taken from your account.

• The process of reconciling your checking account.

• The bank has deducted a service fee for writing the check.

What is the best way to REDUCE ATM FEES according to the document?

• Use ATM machines that charge the highest fees.

• Use ATM machines of banks other than your own.

• Only use your own bank’s ATM machines.

• Withdraw large amounts of money less frequently.