Chapter 10 Money and Banking TEST

anything that people will accept as payment for goods and service

• Money

• debit cards

• medium of exchange

• barter

What is a bank's primary source of income ? 

• the Fed
• China
• interest
• housing market

The fact that money must withstand the wear and tear that comes from being used over and over again is a measure of its

• Portability
• Currency
• Durability
• Age

Money that can be easily divided into smaller units of value has the characteristic of

• Divisibility
• Denominations
• Exchange
• Durability

What is the gold standard?

• A system that used actual gold coins as a country’s money.
• A system in which a country’s money is backed with gold.
• A currency system in which each dollar is worth 1/20 of a pound of gold.
• A money system in which paper currency is good for more than one country.

How does a bank make most of its profit on its business?

• By collecting fees on credit card purchases.
• By collecting fees on safety deposit boxes, traveler’s checks and certified checks
• By receiving fees from the government for handling federal and state accounts
• By paying out less interest on deposits than it earns in interest on loans

Penny is an artist, and John is a carpenter. Penny agrees to paint a portrait of John’s family in exchange for a handmade table created by John. How do Penny and John pay for their goods in their transaction? 

• using a store of value
• through credit
• through bartering
• with currency

The coins and paper bills used as money in a society

• Prices
• Currency
• Bond
• Checks

An institution for receiving, keeping and lending money

• Bank
• Bond
• Stock
• Company

This is the price paid for borrowing money:

• Principal
• Interest
• Maturtity
• Cost