Money
What are 3 uses of money?
Medium exchange, unit of account, stores value
Under who was the national bank was established?
Alexander Hamilton
What is the definition of investing?
Investing is the act of redirecting resources from a being consumed today so that they create some benefits in the future. It is the use of assets to earn income or profit.
What does a bank do?
Receive, keep, and lend money
What is a stockbroker?
A person who links buyers and sellers of stocks.
What are 3 of the 6 characteristics that describe money?
Durability, portability, divisible, universal, limited supply, acceptability
What era transpired in the years? (1837-1863)
Free Banking Area
What is a example of a high risk, high reward investment?
Stocks
What are two types of banks?
- Commercial Bank (No risk) where we put our money to be saved
- Investment Bank (Higher risk) where money is given to the bank for them to invest
What is capital loss?
A stock that has been sold for a lower price than what it was purchased for.
What are 3 sources of money?
Commodities, represenatative money, fiat money
What problems occurred in the free banking era?
- Wildcat banks
- Bank runs and panic
- Fraud
- Many currencies
What is interest?
Interest is the percentage of money that is given to the investor, this money comes from a company.
What are some examples of electronic banking?
- Atm
- Debit Cards
- Home Banking
- Gift cards
What is capital gain?
The difference between the higher selling price and the lower selling price.
What is fiat money?
Aka "Legal tender"or the money we have/use today
What is one source of money that acted like money but was used trade?
commodities
What is return?
Return is the money invested when purchased and the interest that has been made.
Was robbing a bank easier back then during the free banking era or now?
Yes it was easier.
As time increases after taking a loan, what else are you going to be charged with?
Interest on top of the loan
What are the two names for how we measure money?
M1 and M2
What source of money did gold and coins fall under?
Representative money
What are the 2 grading scales for bonds?
AAA- Low risk, low interest
BBB- Higher risk, higher interest
What was a wildcat bank?
A bank in the rural ares that often took advantage of people because they were not regulated.
What are 3 pieces to a financial system?
- Savers
- Investors
- Intermediaries