Role of Money
What term means
“direct exchange of one set of goods or services for another”
Barter
What term describes “widespread panic in which great numbers of people try to withdraw money at the same time”
Bank Run
What does the acronym “FDIC” stand for?
Federal Deposit Insurance Corporation
What term describes “all the money available in the Unted States economy?
Money Supply
The act of redirecting resources from being consumed today so that they may create a benefit in the future?
Investing
Also known as “Legal Tender” what term describes money that is “established by order or decree”
Fiat Money
What is the term for an institution used to receive, store and lend money?
Bank
What term describes “the seizure of property from borrowers who are unable to repay their loans”
Foreclosure
What are two types of accounts that have higher than average interest rates than savings accounts
Certificate of Deposit (CD)
Money Market Accounts
The term for a claim on the property or income of a borrower?
Financial Asset or Security
What type of money uses objects that have value solely because the holder can exchange them from something else of value?
Representative Money
Who was the first Secretary of the Treasury?
Alexander Hamilton
What banking crisis in the 1970’s was caused by the deregulation of the banking industry?
Savings & Loan Crisis
What term refers to a banking system where a percentage of funds his held on hand by banks, while the remaining money is lent out?
Fractional Reserve Banking
What type of financial instrument “pools the savings of many induvial and invests this money into stocks, bonds or other assets?
Mutual Funds
What are the three functions of money
Unit of Account, Medium of Exchange, Store of Value,
What were the two political parties associated with arguments over the formation of a National Bank?
Federalist (Alexander Hamilton) & Antifederalists (Thomas Jefferson)
What is the broad terms that describes the power of the Federal Reserve Bank to make changes in the economy
Monetary Policy
What type of financial institutions are cooperatives created by special groups of people?
Credit Unions
What kind of investment organization is a “private investment organization that employs risky strategies that often make huge profits for investors?
Hedge Funds
What are the six characteristics of money
Durable, Portable, Divisible, Uniform, Limited Supply, Accepted as a form of payment
What section or clause in the U.S. Constitutions is used to support the creation of a national bank
Article 2, Section 8
Elastic Clause
How many banks make up the Federal Reserve System
12, Each representing one area of the country as established by the Congress (Federal Reserve Act)
What kind of lender creates installment loans for customers to purchase things like cars or computers
Finance Companies
A financial strategies of spreading out investments to reduce risk
Diversification