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Chapter 10 & 11

Chapter 10 & 11. Study Guide. 1. Which of the following identifies that money has durability?. A. sturdy B. light weight C. recognizable D. similar color. STURDY. 2. Which of the following is not a function that money performs?. A. medium of exchange Standard of value

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Chapter 10 & 11

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  1. Chapter 10 & 11 Study Guide

  2. 1. Which of the following identifies that money has durability? • A. sturdy • B. light weight • C. recognizable • D. similar color

  3. STURDY

  4. 2. Which of the following is not a function that money performs? • A. medium of exchange • Standard of value • Recognizable currency • Store of value

  5. Recognizable currency

  6. 3. If you wanted money to have value, which economic characteristics is that? • A. stability of value • Scarcity • Acceptability • Uniformity

  7. scarcity

  8. 4. Which of the following best identifies commodity of money? • A. debit card • B. paper money • C. check • D. gold coin

  9. Gold coin

  10. 5. If you give someone a sheet of paper promising to pay the amount owed, what is that? a. commodity of money b. Representative money c. Fiat money d. International money

  11. Representative money

  12. 6. What makes fiat money actually worth its face value? • A. government backing • B. citizens backing • C. gold backing • D. silver backing

  13. Government backing

  14. 7. Alexander Hamilton is best known for giving the US which of the following? • A. Federal Reserve • B. FDIC • C. First Bank of the US • D. Commercial Bank

  15. First bank of the U.S.

  16. 8. When the Federal Reserve Act was signed, what did it create? • A. National bank • B. Securities and Exchange Commission • C. FDIC • D. Federal Reserve

  17. Federal reserve

  18. 9. Why was the FDIC created during the Great Depression? • A. create jobs • B. insure bank deposits • C. regulate bank loans • D. help with war effort

  19. Insure bank deposits

  20. 10. Which of the following is not a service that commercial banks offer? • A. checking accounts • B. savings accounts • C. loans • D. currency exchange

  21. Currency Exchanges

  22. 11. What amount does the FDIC insure each account? • A. $50,000 • B. $100,000 • C. $150,000 • D. $250,000

  23. $250,000

  24. 12. How can customers “earn money” at a bank? • A. accounts earn interest • B. continuous deposits towards accounts • C. bank error on accounts • D. customers pay interest

  25. Accounts earn interest

  26. 13. Why would an individual take out a life insurance policy? • A. increase net worth • B. pay off debts when dead • C. cash it in and purchase a Jaguar • D. tax deduction at the end of the year

  27. Pay off debts when dead

  28. 14. Which of the following is the most common reason people invest their money? • A. to purchase a car • B. to remodel their home • C. to eventually retire • D. to hide money from the IRS

  29. To eventually retire

  30. 15. Which of the following is an example of a short term investment goal? • A. retirement • B. paying off the house • C. grandkids college fund • D. A vacation to Italy

  31. A vacation to Italy!!!!

  32. 16. Which of the following is an example of a long term investment goal? • A. remodel the house • B. purchasing a new car • C. retirement • D. Christmas shopping

  33. RETIREMENT

  34. 17. Which of the following investments has the highest risk levels? • A. stocks • B. savings accounts • C. CD’s (not the music kind) • D. mutual funds

  35. Stocks

  36. 18. If the city of Chicago wanted to build a new park, which would they issue? • A. stocks • B. municipal bond • C. corporate bond • D. mutual funds

  37. Municipal Bond

  38. 19. If Nintendo decides it needs to raise revenue, it could issue which of the following? • A. municipal bond • B. mutual fund • C. Treasury Bill • D. corporate bond

  39. Corporate Bond

  40. 20. When a customer invests in a CD, what should they consider first? • A. maturity date • B. maximum deposit • C. name of CD • D. NCUA insured

  41. Maturity Date

  42. 21. What is it called, when an investor makes money from selling his/her stock? • A. profit • B. capital gains • C. tax deduction • D. net gain

  43. Capital Gains

  44. 22. Most investors will purchase which type of stock? • A. preferred • B. traditional • C. common • D. admiral

  45. Common

  46. 23. These companies: WMT, HD, F, are found on which stock exchange? • A. AMEX • B. NASDAQ • C. NYSE • D. Chicago Futures Market

  47. NYSE

  48. 24. What does the economic term Over-the-Counter refer to? • A. stock traded electronically • B. stock traded by brokers • C. stock purchased anywhere • D. stock purchased without prescription

  49. Stock traded electronically

  50. 25. Which stock exchange is the oldest and found in NYC? • A. AMEX • B. NASDAQ • C. NYSE • D. Chicago Futures Market

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