NEW
Font size
Worksheets3.3 Quiz on Money
Total questions: 71
Worksheet time: 36mins
What is money?
A type of food
A medium of exchange, a unit of account, and a store of value
A kind of animal
A type of clothing
What is one use of money as a Medium of Exchange?
To keep its value if stored
To compare values of goods
To determine value during exchange
To make money disappear
What does money as a Unit of Account help us do?
Make money grow
Compare the values of goods
Store money in a bank
Spend money quickly
What is the purpose of money as a Store of Value?
To lose its value quickly
To keep its value if stored
To be used immediately
To change into other forms
What is the term for coins and paper bills used as money in a society?
Currency
Durability
Portability
Divisibility
Which characteristic of money means it must withstand physical wear and tear?
Portability
Durability
Uniformity
Acceptability
What does portability mean in terms of money?
Money must be the same in terms of what they buy
Money must be available in limited quantities
People need to be able to take money with them
Money must be easily divided into smaller units
What does divisibility mean for money?
Money must be available in limited quantities
Money must be easily divided into smaller units
Money must be the same in terms of what they buy
Everyone must be able to exchange money for goods
What does uniformity mean in the context of money?
Money must be available in limited quantities
Money must be easily divided into smaller units
Any two units of money must be the same in terms of what they buy
Everyone must be able to exchange money for goods
What does limited supply mean for money?
Money must be available only in limited quantities
Money must be easily divided into smaller units
Any two units of money must be the same
Everyone must be able to exchange money for goods
What does acceptability mean in terms of money?
Money must be available in limited quantities
Money must be easily divided into smaller units
Any two units of money must be the same
Everyone must be able to exchange money for goods and services
What is commodity money?
Money that has value because the government says so
Money that can be exchanged for something else of value
Money that consists of objects that have value in themselves
Money that is only used in foreign countries
What is representative money?
Money that has value because the government says so
Money that can be exchanged for something else of value
Money that consists of objects that have value in themselves
Money that is only used in foreign countries
What is fiat money?
Money that has value because the government says so
Money that can be exchanged for something else of value
Money that consists of objects that have value in themselves
Money that is only used in foreign countries
What did the Federal Reserve Act of 1913 create?
The Federal Reserve System
The Federal Deposit Insurance Corporation
The Gold Standard
The National Bank of America
What does the FDIC insure?
Customers' deposits up to $250,000
Gold reserves
Stock market investments
Real estate properties
What is one function of banks and credit unions?
Selling groceries
Storing money
Building houses
Teaching classes
What do banks issue that allows people to buy goods and services?
Debit cards
Credit cards
Gift cards
Membership cards
Which of the following is a type of account for saving money?
Shopping account
Checking account
Travel account
Entertainment account
What do banks help new businesses do by making loans?
Close down
Get started
Move locations
Change names
What is a mortgage used for?
Buying groceries
Purchasing real estate
Paying for vacations
Buying clothes
What can customers use ATMs for?
Watching movies
Depositing money
Cooking food
Playing games
What are debit cards used for?
Buying toys
Withdrawing money from a checking account
Reading books
Painting pictures
How can banks and credit unions offer their services online?
Through TV shows
Through websites and apps
Through radio stations
Through newspapers
What is the primary objective of a credit union?
Maximize profit
Meet member/owner needs
Offer more products
Increase stock value
Who owns a bank?
Volunteers
Members
Stockholders
Directors
How is decision-making done in a credit union?
Only stockholders vote
One vote per member
Directors decide
Based on stock value
What type of organization is a bank?
Not-for-profit cooperative
For-profit corporation
Volunteer-based
Member-owned
Who benefits from a credit union?
Stockholders
Members/owners
Directors
Paid employees
What is the largest source of income for banks?
Deposits from customers
Interest from borrowers
Fees for services
Selling products
What is interest?
A gift from the bank
The price paid for the use of borrowed money
A type of bank account
A fee for using a credit card
What is investment?
Spending all your money now
Saving money for future benefits
Buying toys
Eating ice cream
What happens when you invest at a young age?
You lose all your money
You get less interest
You accumulate more compound interest
You have no money left
What do funds become available for when people save or invest?
Buying candy
Businesses to use to expand and grow
Going on vacation
Playing games
What is a financial system?
A place to play
A system that allows the transfer of money between savers and borrowers
A type of food
A kind of animal
What is one tip for saving for retirement?
Spend all your money now
Take advantage of long-term compounding interest by investing early
Ignore your budget
Wait until you're 60 to start saving
If you start saving at age 25, how much can you have by age 65?
$315,831
$703,040
$992,680
$495,029
What is the total savings if you begin at age 55?
$703,040
$495,029
$992,680
$315,831
What do financial intermediaries help with?
Cooking food
Channeling funds from savers to borrowers
Painting pictures
Building houses
What is one service provided by financial intermediaries?
Liquidity - allowing savers to easily convert their assets into cash
Cooking classes
Art lessons
Gardening tips
What do banks, savings and loan associations, and credit unions do?
Take in deposits from savers and lend funds to businesses
Sell clothes
Teach math
Organize parties
What do finance companies do?
Make loans to consumers and small businesses
Sell toys
Write books
Plant trees
What do mutual funds do?
Pool savings and invest in stocks and bonds
Bake cakes
Design clothes
Build cars
What do life insurance companies provide?
Financial protection to families
Cooking recipes
Travel guides
Sports equipment
What are pension funds set up to do?
Collect deposits and distribute payments to retirees
Teach languages
Organize concerts
Sell electronics
What is the main advantage of a savings account?
High return
High risk
Greater liquidity
Low liquidity
What usually has a greater return but reduced liquidity?
Savings account
Certificates of deposit
Cash
Physical assets
What happens when you invest in a friend's Internet company?
No risk involved
Guaranteed profit
Risk of the company failing
Immediate return
What does a higher potential return on investment usually mean?
Lower risk
Greater risk
No risk
Guaranteed return
What is 'return' in investment terms?
Money lost in investment
Money received above the initial investment
Initial investment amount
Money saved in a bank
What is the interest rate that the issuer will pay the bondholder called?
Maturity
Par value
Coupon rate
Yield
What does the term "maturity" refer to in bonds?
The interest rate
The time when payment is due
The amount paid to purchase the bond
The bond's rating
What is the "par value" of a bond?
The interest rate
The time when payment is due
The amount paid to purchase the bond
The bond's rating
What is a portion of stock called?
Share
Dividend
Capital gain
Loss
How can stockowners earn a profit?
By selling stock for less than they paid
By receiving dividends and capital gains
By buying more stock
By not selling any stock
What happens when a stockholder sells stock for more than they paid for it?
They suffer a capital loss
They earn a capital gain
They receive a dividend
They lose money
What is a stock split?
The division of a single share of stock into more than one share.
The combination of multiple shares into one share.
The process of buying more stocks.
The selling of all shares in a company.
Why do stock splits occur?
Because the price of a stock becomes too low.
Because the price of a stock becomes so high it discourages investors.
Because the company wants to sell more products.
Because the company is going out of business.
Why is purchasing stock considered risky?
Because it always guarantees a profit.
Because the firm may encounter economic downturns.
Because it is safer than bonds.
Because it is a guaranteed investment.
What is a stockbroker?
A person who links buyers and sellers of stock
A person who cooks food
A person who drives a bus
A person who builds houses
Where do stockbrokers work?
Brokerage firms
Hospitals
Schools
Restaurants
Where is stock bought and sold?
Stock exchanges
Grocery stores
Libraries
Parks
What is the largest stock exchange in the country?
NASDAQ-AMEX
The New York Stock Exchange (NYSE)
The Dow Jones
The S & P 500
What does NASDAQ-AMEX specialize in?
Food and agriculture stock
High-tech and energy stock
Clothing and fashion stock
Real estate stock
What is a bull market?
When the stock market falls over time
When the stock market rises steadily over time
When the stock market stays the same
When the stock market is unpredictable
What does the Dow Jones Industrial Average show?
The performance of 500 different stocks
The performance of 100 different stocks
How stocks of 30 companies in various industries have changed in value
The performance of 50 different stocks
What does the S & P 500 index track?
The performance of 100 different stocks
The performance of 500 different stocks
The performance of 30 different stocks
The performance of 50 different stocks
What was the collapse of the stock market in 1929 called?
The Great Recession
The Great Crash
The Big Fall
The Stock Drop
What is speculation?
Buying goods with cash
Making high-risk investments with borrowed money
Saving money in a bank
Selling goods at a market
What was one effect of the Great Crash?
People became richer
Many people lost their jobs, homes, and farms
Everyone started buying more stock
The economy improved quickly
By the early 1980s, what percentage of households in the United States owned stock?
50 percent
75 percent
25 percent
100 percent
