Economics Unit 4 Review

Imagine Mia and Jackson are roommates. Which of the following scenarios best represents a barter system they might use?

• Instead of paying the full amount for a car, Liam pays 10 percent in cash and pays for the rest in monthly installments.

• Instead of paying rent, Mia cleans the house for Jackson, the owner.

Imagine Harper is on a shopping spree! Which of the following scenarios best illustrates money as a unit of account?

• Harper checks the price of a stylish camera at several stores before buying it at the lowest price

• Harper lends $25.00 to her friend Sophia

Imagine you're in a history class with Charlotte, Nora, and Abigail, discussing ancient economies. Charlotte raises a question: 'What's the main disadvantage of using shells as money instead of coins?'

• portability

• uniformity

Imagine Isla is playing a trivia game. She needs to choose which of the following is an example of representative money. Can you help her?

• a fur coat

• an IOU note

Imagine Scarlett and Abigail are discussing banking safety. Scarlett asks, 'What is the purpose of the Federal Deposit Insurance Corporation (FDIC)?' Can you help them out?

• to make sure that the government has enough gold to cover its expenses

• to make sure that customers do not lose money if a bank fails

Oliver and Ethan are debating in history class! They're curious: What did the Federalists believe about banking?

• They believed that a centralized banking system was necessary.

• They believed that the banking system already in existence was sufficient.

Imagine you're in a history class with Benjamin, Elijah, and Abigail, and your teacher just asked: 'During the Free Banking Era, what was a common occurrence?'

• Repaying of loans was not closely monitored.

• Currency varied widely from state to state.

Imagine Michael is sorting his assets for a finance class project. Which of the following is NOT considered a liquid asset?

• cash

• a certificate of deposit

Imagine Nora and Rohan are on a treasure hunt and find a chest full of gold bars and coins. Why might they prefer to use the coins as money instead of the gold bars?

• coins are more portable

• coins are more durable

Imagine you're in a lively debate with Aria, Jackson, and Aiden about economics. Aiden throws a challenging question: 'What condition is absolutely necessary for a fiat money system to function effectively?' How would you respond?

• Banks must hold sufficient gold to cover any paper money they give out.

• The government must control the money supply.