Consumer Economics Lesson #11 Review

Lesson #11 Test Review Welcome to the online test review. Working through these questions and studying will give you a good indication of what is on the exam. Click here to begin the review

Question #1 For money to be a medium of exchange, it must be in limited supply TrueFalse

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Question #2 Fiat money has no inherent worth (it only has value because the government says it does) True False

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Question #3 Because of the Federal Reserve System, banks did not fail during the depression of the 1930’s? True False

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Question #4 The Legal Tender Act of 1862 created the currency called greenbacks? True False

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Question #5 State banks were required by law to join the Federal Reserve when it started in 1913 True False

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Question #6 Commodity money has an alternative use as an economic good. True False

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Question #7 When money becomes too plentiful, which of the following happens? It becomes less durable It can easily be divided It loses its value

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Question #8 The FDIC was established to … Protect consumers savings Act as a back- up to the Federal Reserve World Domination

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Question #9 How many Federal Reserve banks (territories) are there in the system?

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Question #10 Continental Dollars were a problem because… Too many were printed There was too much gold backing them Both of the above

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Question #11 For money to have value, it must have all of the following except… Durability Divisibility Portability Plentiful availability

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Question #12 The FDIC insures people accounts for a maximum amount of … $100,000 $125,000 $150,000

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Question #13 Continental Dollars were printed to support… The War of 1812 The Crimean War The Korean War The Revolutionary War

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Question #14 The Federal Reserve System was established in…

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Question #15 Individuals can get loans from the Federal Reserve bank? True False

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Question #16 A rush of depositors to withdrawal their money from a bank before it fails is called? Mandatory Withdrawal Run on the Bank

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Question #17 Coins in circulation last about 20 years, this makes them … Durable Divisibility Portability Plentiful availability

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Question #18 Congress created the National Banking System (NBS) by passing which law? Glass – Steagall Act National Banking Act Campbell – Seavers Law

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Question #19 What year was the National Banking Act passed

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Question #20 What type of economy relies on the trade of g/s Command Market Barter

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Question #21 What was the legal tender called first issued in 1861 to finance the Civil War Greenbacks Red Notes Dollar Bills

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Question #22 When the government declares an item to be money without gold backing Currency Money Printed Money Fiat Money

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Question #23 Silver Certificates were paper currency backed by silver dollars was passed in …

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Question #24 The NBS lead to more _______ and higher ______ of banks (which gave people confidence in banks) Paper money / security Inspections / standards Banks / profits

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Question #25 Who does the Federal Reserve lends money to whom? Individuals Mr. Campbell Foreign Banks Other US banks

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Question #26 What year was the Federal Reserve created?

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Question #27 What was the reason for the Federal Reserve to be created? Banking crisis of 1910 Result of World War 1 Stock market collapse Great Depression of 1929

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Question #28 How do you get on the board of Governors for the Federal Reserve? Appointed by the President, confirmed by senate Appointed by the President, confirmed by congress Appointed by chairman of the New York Fed bank

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Question #29 What is the nickname for the Federal Reserve? “The mightiest bank in the world” “The bankers bank” “the money store”

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Question #30 Who many banks are in the Federal Reserve system?

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Question #31 Who is the only permanent member of the FOMC? Chairman of the Fed of New York There is no permanent member Chairman of the Fed of Dallas Chairman of the Fed of Cleveland

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Congratulations You’ve made it through the review questions, click below for more valuable test information

You need to know the following definitions Medium of exchange Gold certificate Monetary standard Legal tender Gold standard Click on the button for more definitions

You need to know the following definitions (cont) State bank Federal Reserve System Fiat Money National Banking System Credit Union Click on the button for more info Click here if you are done reviewing

You also need to know the following Disadvantages of the Gold Standard What the constitution says about money What makes money “money” Click on the button for more info Click here if you are done reviewing

You also need to know the following Characteristics of money Managed Money Supply “The Fed Today” brochure (at least 5 or six questions from this worksheet) Click on the button for more info Click here if you are done reviewing

Test Format True & False Multiple Choice Matching Completion Bonus Questions Click here for last slide

Good Luck Remember to study, get a good nights sleep, and eat a healthy breakfast