Functions of Money
What is one function of money that allows it to be used for purchasing goods and services?
Medium of Exchange
What type of currency replaced "The Gold Standard"?
Fiat Currency
What is the name of physical currency like paper money or coins used for transactions
Cash
What is a legal responsibility of using credit?
Timely repayment of loans
Why is credit important?
It enables access to loans for significant purchases like homes or cars and can affect financial opportunities.
What is one function of money where it provides a numerical unit that allows people to compare the value of different goods and services.
Unit of Measure
What is a debt security issued by the government to support government spending, paid back to the public with interest?
Government Bond
What is the ability to borrow money or access goods with the promise to pay later?
Using Credit
What is the agreed upon date on which an investment ends, triggering repayment?
Maturity Date
What are the risks associated with poor credit?
Poor credit can result in higher interest rates, difficulty obtaining loans, and limited financial options.
What is one function of money that allows it to retain value over time, allowing individuals to save it and spend it later?
Store of Value
Identify a type of currency that is not physical like paper money or coins.
Electronic Transfer
What is the difference in a debit card and a credit card?
Can you use Government bonds for day-to-day purchases?
No
What is the fee a bank charges for using credit?
Interest
Why is it important for money to act as a medium of exchange?
It makes trade easier and more efficient
What is a document that instructs a bank to transfer funds from one account to another?
What is the most universally accepted form of financial exchange?
Cash
In the US, who is the only entity allowed to create money
The Federal Reserve
What is the type of credit that allows borrowers to borrow up to a certain amount of money and make payments as they go?
Revolving credit
Name the three functions of money
Medium of Exchange
Store of Value
Unit of Measure
What is banknote another word for?
Money
What is a disadvantage of using cash as a form of financial exchange?
Risk of loss or theft
How do you build good credit history?
Responsible use of credit
What is the type of credit where a borrower receives a fixed amount of credit and must pay it back in installments?
Installment credit