WorksheetsMoney and Banking
Total questions: 40
Worksheet time: 21mins
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
Income tax increases personal income
True
False
A person makes $500 a week and receives a paycheck of $447. The amounts of $500 and $447 represent the person’s __________ and _________.
Gross pay; net pay.
Net Pay; commission.
Hourly rate; wages.
Bonus; take home pay.
Which 2 of the following are mandatory payroll deductions?
Federal taxes
Property tax
Life insurance
Social Security (FICA)
What is the potential advantage of using a direct deposit for receiving a paycheck?
It increases the amount of deposit.
It provides an opportunity to double your paycheck.
It allows for quicker access to the funds compared to receiving a paper check.
It requires a physical trip to the bank to deposit the check.
What are the 3 main functions of the Federal Reserve?
Conducting Monetary Policy.
Deducting Federal Income Tax.
Providing Services to Financial Institutions.
Regulating Financial Institutions.
Changes in the money supply CANNOT influence overall levels of spending, employment, and prices in the economy.
True
False
Which of the following are 3 services that the Federal Reserve provides to the banking sector and the public?
Supplying paper money and coins to banks.
Processing checks and electronic payments.
Personal banking services.
Protecting consumers through regulation and education.
The goal of the Federal Reserve System is to help the economy achieve stable prices, full employment, and economic growth.
True
False
FDIC stands for
(a)
The FDIC insures every bank account for up to
(a)
Which of the following is NOT one of the 3 main responsibilities of the regional reserve banks?
Contributing to monetary policy
Creating banking regulations
Providing financial services
Supervising commercial banks
A bank run (or run on the bank) is when many depositors, due to a fear of a bank failure, rush to withdraw their money. When it occurs at multiple banks, it is called bank panic.
True
False
How quickly an asset can be converted into cash is known as what?
Liquidity
Ease of Withdraw
Transferability
Ease of Access
What are the ways that the banking system prevents bank runs from occurring?
Deposit insurance (FDIC)
Capital requirements
Bank examinations
Emergency loans from the Fed thru the discount window
Reserve requirements
Credit Unions offer all of the same services as commercial banks but are not "for profit" and require a membership to utilize.
True
False
Inflation happened to this burger. How did inflation affect it?
The cheeseburger got cheaper.
The Cheeseburger got more expensive.
The cheeseburger got smaller.
Which of the following best describes deflation?
A decrease in the cost of goods and services
An increase in the cost of goods and service
A decrease in purchases of a good or service
An increase in purchases of a good or service
Which of the following best describes "value for money" in a financial context?
Spending the least amount of money possible
Achieving the best possible outcome for the amount spent
Maximising profits at any cost
Minimising employee salaries
Which of the following is not a source of income?
Your annual salary for doing your job
Your monthly student loan payment
The stipend you receive for doing an internship
The wages you receive after a work shift
People who are unbanked are most likely to...
Have a high credit score
Have a low income
Have a college degree
Have a mortgage
Overdraft protection...
Allows you to withdraw more money than you have in your account
Protects your account from unauthorized transactions
Helps you save money for emergencies
Provides insurance for your deposits
Which of the following is TRUE about banks and credit unions?
Banks are for-profit institutions, while credit unions are non-profit
Banks offer higher interest rates on savings accounts than credit unions
Credit unions are insured by the FDIC, while banks are not
Banks are owned by their customers, while credit unions are owned by shareholders
Which of the following is NOT required to open a checking account?
Proof of identity
Proof of address
Social security number
Minimum age requirement
How can you protect your checking account when using online and mobile banking?
Use strong and unique passwords
Avoid using public Wi-Fi networks
Regularly monitor your account activity
All of the above
About how much should you save in an emergency fund?
1 month of expenses
3 months of expenses
6 months of expenses
1 year of expenses
What are some reasons for why so many Americans live paycheck-to-paycheck?
Low wages
High cost of living
Lack of financial education
All of the above
How does inflation impact the money in your savings account?
It increases the value of your money
It decreases the value of your money
It has no impact on the value of your money
It depends on the interest rate
Saving accounts differ from checking accounts in that...
Saving accounts have higher interest rates
Saving accounts have more fees
Saving accounts have unlimited transactions
Saving accounts have overdraft protection
What role does the federal government play alongside the Federal Reserve according to the document?
It also helps ensure economic stability
It competes with the Federal Reserve
It focuses solely on healthcare
No role is specified in the document
What is the primary method the Federal Reserve uses to control inflation according to monetary policy?
Adjusting government spending
Modifying tax rates
Implementing interest rate changes
Regulating stock market
