Money, Banking, and the Federal Reserve

What does Inflation do to the value of money?

• Makes it go up.
• Makes it go down.
• Makes it stay the same.

Influencing the economy by changing the reserve requirement or the Discount Rate is called:

• Fiscal policy

• Monetary policy

• Tight Money

• Easy Money

Capacity:

• Can you pay back the loan?

• Will you pay back the loan?

• What can the bank take if you don't pay back the loan?

Does increasing the money supply cause inflation or deflation?

• Inflation
• Deflation

Subprime loan:

• Loans made to people who have struggled to pay back loans in the past

• Loans made to people who always pay their loans promptly

• Loans made to people who have excellent character, capacity, and capital

• Loans made to people who are a little shady

Store of Value:

• Money can maintain value over time

• Money is a measurement of value

• Money is accepted in exchange for goods/services

The American Dollar bill is an example of

• Commodity Currency
• Representative Currency
• Fiat Currency
• Public Currency

Fee charged to borrow money

• Inflation
• Interest
• Discount rate
• Reserve requirement

Character:

• Will you pay back the loan?

• Can you pay the loan back?

• What can the bank take if you don't take back the loan?

The 2008 Financial Crisis was caused by:

• Banks giving out subprime loans

• Men and women playing hard and fast with the rules

• The Illuminati