Chapter 5 - Quick Flashcard

Front

Which of the following is NOT a primary function of money? Medium of exchange, Unit of account, Source of entertainment, Store of value

Back

Source of entertainment

Front

Which of the following best describes the function of money as a unit of account? Options: It is used to store wealth over time., It represents a physical commodity like gold., It allows for the comparison of the value of different items., It facilitates the exchange of goods and services.

Back

It allows for the comparison of the value of different items.

Front

What characteristic of money ensures that it can be easily carried and used in transactions?

Back

Portable

Front

What does the term 'divisible' mean in relation to money?

Back

Money can be broken down into smaller units.

Front

What does the term 'limited supply' refer to in the context of money?

Back

Money should be scarce to maintain its value.

Front

Which type of money is backed by a physical item of value, such as gold or silver? Options: Fiat money, Representative money, Commodity money, Digital currency

Back

Commodity money

Front

Which of the following best defines fiat money? Options: Money that is only used in digital transactions, Money backed by a physical commodity, Money established by government regulation, Money that has intrinsic value

Back

Money established by government regulation

Front

Which of the following statements accurately describes the Federal Reserve System? Options: It is responsible for managing the national debt., It was created to regulate the stock market exclusively., It serves as the central banking system of the United States., It was established to issue physical currency only.

Back

It serves as the central banking system of the United States.

Front

What is the role of the Federal Reserve Board?

Back

To oversee the Federal Reserve Banks.

Front

What is the primary role of the Federal Deposit Insurance Corporation (FDIC)?

Back

To protect depositors' funds in case of bank failures.