Unit 1: History of Money Exam Review

Which of the following terms refers to the process by which the Federal Reserve controls the money supply and interest rates to achieve economic goals?

• Commercial banking

• Monetary policy

• Financial stability

• Bartering

What is the system of production, distribution, and consumption of goods and services in a country called?

• Economy

• Inflation

• Recession

• Monetary policy

Money borrowed from banks that must be repaid with interest is known as:

• Deposits

• Currency

• Loans

• Bartering

What is the term for money kept in banks by individuals and businesses?

• Loans

• Deposits

• Currency

• Inflation

Which of the following are financial institutions that accept deposits and provide loans to individuals and businesses?

• Commercial banks

• Federal Reserve banks

• Central banks

• Bartering systems

What is the cost of borrowing money or the return on savings called?

• Inflation

• Interest rates

• Monetary policy

• Financial stability

What is the increase in prices over time called?

• Recession

• Inflation

• Deposits

• Bartering

A period of economic decline characterized by reduced spending and higher unemployment is known as:

• Financial stability

• Inflation

• Recession

• Monetary policy

What is the condition where the financial system operates smoothly and without disruptions called?

• Central banking

• Monetary policy

• Financial stability

• Commercial banking

Which institution manages a country's currency and monetary policy?

• Federal Reserve

• Commercial bank

• Central bank

• Bureau of Engraving and Printing