iCivics Bank Credit Economy Quiz

Can you exchange money for goods and services?

• yes

• no

Answer explanation

Money is the “medium of exchange” that people use to pay for things.

Does “money” ONLY refer to currency?

• yes

• no

Answer explanation

Money includes currency and bank account  balances, which can be turned into currency.

Can you make unlimited withdrawals from a savings account?

• yes

• no

Answer explanation

Federal law limits the number of certain kinds of withdrawals you can make each month.

Is it safe to keep your money in the bank?

• yes

• no

Answer explanation

The federal government insures bank deposits up to a certain amount of money.

FDIC

Do banks pay people more for savings accounts than they charge for loans?

• yes

• no

Answer explanation

Savings accounts pay a TINY amount of interest. Interest you pay on loans is much higher.

Could most people start a business without a loan?

• yes

• no

Answer explanation

Starting a business can be expensive. Loans provide money for equipment and startup costs.

Does lending make more money available to spend?

• yes

• no

Answer explanation

Lending actually multiplies the amount of money out in the community.

 Are banks required to keep some money in reserve?

• yes

• no

  
  

Answer explanation

Banks must keep a certain percent of deposits in reserve.

Does anyone supervise the banking industry?

• yes

• no

Answer explanation

The Federal Reserve and other federal agencies supervise the banking industry.

Does the Fed want the economy to swing wildly up and down?

• yes

• no

Answer explanation

The Fed’s goal is to keep the economy in balance.