Money & Banks
What is money?
A medium of exchange in the form of bills or coins.
What is a key function of the Federal Reserve?
Managing the nation's monetary policy.
What are securities?
Assets that can be traded, like stocks or bonds.
What are commercial banks?
Financial institutions that offer loans and hold deposits
What is the benefit of property insurance?
It protects belongings if they're damaged.
How do banks help consumers protect money?
By providing a safe place to store it.
How many district banks are there?
12
How do people buy stocks today?
By placing an order with an online broker.
What is fractional reserve banking?
Banks loan out most deposits to increase money supply.
How do insurance companies help the economy?
They manage risk and provide tax revenue.
What happens when the money supply increases?
Prices tend to go up.
What is the Federal Reserves duty?
Managing the level of the national money supply
What is a mutual fund?
A pool of money invested in various assets.
What is a harmful bank action?
Refusing all loans
What is a common insurance type?
Health, auto, property.
How do banks help businesses grow?
They lend money to businesses.
How can the Federal Reserve slow inflation?
By decreasing money supply.
Why invest in stocks?
They offer partial ownership and potential high returns.
What is an investment firm?
A company that manages pooled investments.
Why buy insurance?
To manage financial risk.
What action by banks could hurt the economy?
Stopping all loans.
What part of the Federal Reserve sets policy?
The Federal Open Market Committee
How does the stock market affect the economy?
It influences consumer confidence and spending.
What happens during a stock market crash?
People lose confidence and spending drops.
Who buys insurance?
Individuals and businesses.