Economics - Unit 4 Review

Front

Commodity money can best be described as —

Back

a form of money which has an intrinsic value, meaning it is worth something in its own right rather than simply being a token of financial value

Front

What is the term for money that holds value solely because the government says it does?

Back

fiat money

Front

A major drawback of the barter system is that transactions are —

Back

restricted by supply and demand

Front

What is a benefit of using a debit card?

Back

Obtaining cash without carrying physical money

Front

The Federal Reserve System designed in the manner described in the box resulted in the creation of —

Back

a decentralized system of banks

Front

What is a significant way the Federal Reserve can impact local economies?

Back

It can influence the cost of borrowing by changing interest rates.

Front

The Federal Reserve uses reserve requirements, the discount rate, and open market operations to primarily influence the —

Back

money supply in the economy

Front

In a period of economic downturn, how would the Federal Reserve Banks likely respond? Options: easing monetary policy to facilitate lending, increasing the discount rate to manipulate the money supply, enforcing a strict monetary policy to make lending harder, decreasing open market operations to shrink the money supply

Back

easing monetary policy to facilitate lending

Front

What was the impact of leaving the gold standard on the value of the U.S. dollar?

Back

The value of the dollar decreased as more currency could be printed.

Front

In the American free market system, what is one of the main responsibilities of the government?

Back

Regulate product safety