Money and Banking

What are 3 functions of money?

• Medium of exchange

• Store of value

• System of bartering

• Unit of account

Which of the following are 3 characteristics of money?

• Uniformity

• Limited Supply

• Portability

• Availability

• Flexibility

Where does fiat money get its value?

• From the commodity money found in storage.

• From gold reserves in vaults.

• From the U.S government.

• From the Bureau of Engraving and the U.S Mint.

Your take-home pay, or net income, is

• the amount you receive after benefits, such as vacation pay and health insurance, have been added.

• the amount you receive after taxes, insurance, or other costs have been subtracted.

• the total amount you earn.

• the amount of cash on hand you have.

The basic money supply in the United States is made up of currency, coins, and checking account deposits.

• True

• False

Which of the following best illustrates the function of money as a medium of exchange?

• Saving money in a bank account for future use.

• Using money to compare the value of different goods.

• Receiving money in return for providing a service.

• Using money to measure the worth of an item.

What is the agency responsible for collecting taxes at the Federal level?

• Security and Exchange Commission (SEC).

• Internal Revenue Service (IRS).

• Consumer Financial Protection Bureau.

• Federal Reserve System (FED).

If the inflation rate rises from 3 to 5%, how will it affect the purchasing power of someone typically spending $200 on consumer goods?

• Their purchasing power will increase.

• Their purchasing power will remain the same.

• Their purchasing power will decrease.

• Their purchasing power will change unpredictably.

Who is most impacted by a rising rate of inflation?

• Renters in urban areas.

• Individuals with higher levels of savings.

• People with variable-rate mortgages.

• Retirees living on fixed incomes.

Which of the following are considered sources of income?

• Employment

• Interest income

• Inheritance

• Taxes

• Lottery Winnings