Role of Money & Changes in American Banking

Buying the latest compact disc with a $20 bill means money is functioning as a:

• medium of exchange

• store of value

• unit of account

• standard of deferred payment

• form of near money

What does the acronym FDIC stand for

• Federal Debit Investment Corporation

• Federal Deposit Incorporated Committee

• Federal Deposit Insurance Corporation

• Federal Debt Insolvency Corporation

Currency should be portable. This means:

• You can carry it easily.

• It was originally designed in a port.

• It is either rectangular or circular.

• It is made out of paper.

Currency should be durable. This means:

• You cannot light it on fire.

• It must be tough so it doesn't break.

• It should be cheap to mass produce.

• It should be silver or gold.

Currency should be divisible. This means:

• You can use smaller pieces of it if you want.

• You can cut it in half and give both pieces to a vendor.

• If it's lost someone must return it to you.

• It must have a picture of a president on it.

What function of money the picture represents? 

• Medium of Exchange
• Store of Value
• Unit of Account
• Stable 

What is NOT a characteristic of money? 

• Divisible
• Portable
• Acceptable
• Accessible

What is the name of our nation's central bank?

• The Federal Reserve
• The United States National Bank
• The National Bank of the United States
• Bank of America

The primary role of the Federal Reserve Bank is to steer the economy by

• controlling the budget
• setting spending levels.
• controlling the money supply.
• loaning out money.

_____________ is money by government decree, has no alternative value

• Gold standard

• Specie

• Barter

• Fiat money