History of Money/The Federal Reserve
What is M1 Money Supply (I need a definition, not examples)
Any money that is liquid (easy to spend)
Name two similarities between banks and credit unions.
Money is insured, Direct Deposit is Available, Money is easy to access, have checking and savings accounts, offer loans, have ATMs, offer investment and retirement accounts.
What kind of account does your money go to when your paycheck is direct deposited to your bank account?
Checking Account
What is interest (when a consumer is saving)?
Money that the bank pays to their customers when money is stored in their account.
This type of payment involves someone paying upfront to receive a piece of paper that stores the value of said upfront payment.
Money Order
If a criminal impersonates a business or person that they are not affiliated with in order to obtain private information, they are doing what?
Phishing
The interest rate when banks borrow from other banks is called...
The Federal Funds Rate
What is the best way to avoid a monthly service fee?
Keep a minimum balance in your account.
What is the main benefit of requesting a cashier's check when you are receiving a large payment from someone?
Ensuring that the check will not bounce.
What does APY mean? (I need a definition, not what the acronym means)
Annual Percentage Yield, it is the percentage of interest you will make in a year.
Which form of payment would occur if a person pays their rent through monthly auto payments?
Electronic Funds Transfer
Rank the three ways to pay with a credit card from safest to most risky
Tap to Pay, Chip, Magnetic Strip
A currency whose value is backed by the government who prints the currency is called a(n)...
Fiat Currency
What are the two major disadvantages of credit unions?
More strict application process and tend to be smaller/more local.
What are the three types of common savings accounts?
Standard/Regular Savings Account, Money Marketing Account, Certificate of Deposit.
What is the difference between simple interest and compound interest.
Simple interest is paid based on the initial deposit amount (principal), whereas compound interest is paid as a percentage of the current account balance.
What is the main difference between debit and credit cards?
Debit cards use money from your checking account, whereas credit cards open an open line of credit (like a small loan) that you must pay back to the bank after a period of time.
You went to the gas station yesterday since your car was getting low on gas. Your bill at the pump was $30 but when you checked your bank account later, the charge at the pump was for $400. What likely occurred?
There was likely a skimmer on the gas station pump.
If the fed wants to increase public spending, what would they do? How would their action increase public spending?
They would decrease the federal funds rate. This would make lending money cheaper and increase the public's money supply.
Non-Sufficient Funds (NSF) Fee
A check that has been written, but not yet deposited is called a(n)...
Outstanding Check
What is the main advantage of using a check register when you have access to an online banking account?
Check registers keep track of outstanding checks.
What are the two types of payment apps and give one example of each.
Digital Wallet: Apple Pay, Google Pay, Samsung Wallet
Peer to Peer: Cash app, Paypal, Venmo, Zelle
Why might a criminal want to open a new bank account in your name.
To take out loans that they do not have to pay back, to put dirty money into, or to purchase illicit goods and be more difficult to track.
Would banks rather have a lot of required reserves or excess reserves? Why?
What is overdraft protection?
When you cannot afford a purchase, your bank opens up a small loan to cover the difference.
What are the three types of endorsements and what do they do?
Blank Endorsement (Means the check can be deposited or cashed)
Restrictive Endorsement (Means the check can only be deposited into the account of the payee)
Special Endorsement (The ownership of the check can be transferred to another person)
What is reconciliation?
Clara is getting paid in next week. Her favorite artist shadow drops a vinyl of her new album that Clara knows will sell out in less than 2 hours. Clara is really upset because she does not have enough money in her bank account for it right now, but she will after her paycheck. What payment method would you recommend Clara use?
Buy Now Pay Later or Credit Card
Name 5 things you can do to protect yourself from identity theft.
Shred important documents, use strong, unique passwords, set up two factor authentication, call back if you receive a call from a bank before divulging information, avoid accessing bank accounts on public networks, use tap to pay, do the wiggle test on payment devices, only use official links to shop online, and change passwords in the event of a data breach.