Podcast
Questions and Answers
What is the primary function of money in an economy?
What is the primary function of money in an economy?
- To store value
- To earn interest
- To serve as a medium of exchange (correct)
- To reduce risk
Which institution is primarily responsible for creating money in the United States?
Which institution is primarily responsible for creating money in the United States?
- Federal Reserve System (correct)
- Internal Revenue Service (IRS)
- Federal Deposit Insurance Corporation (FDIC)
- Department of the Treasury
What is the consequence of having too little money in an economy?
What is the consequence of having too little money in an economy?
- High inflation
- Increased employment
- Rapid economic growth
- Constrained economic growth (correct)
What is the purpose of a check in a financial transaction?
What is the purpose of a check in a financial transaction?
What is the advantage of using electronic funds transfers?
What is the advantage of using electronic funds transfers?
Why do individuals and businesses prefer to hold money in depository institutions?
Why do individuals and businesses prefer to hold money in depository institutions?
What is the primary function of financial institutions in terms of savings?
What is the primary function of financial institutions in terms of savings?
What is the consequence of having too much money in an economy?
What is the consequence of having too much money in an economy?
What is one of the primary reasons people place small cash amounts into depository institutions?
What is one of the primary reasons people place small cash amounts into depository institutions?
Who can avail loans from financial institutions?
Who can avail loans from financial institutions?
What distinguishes some financial institutions from others based on the type of loans they make?
What distinguishes some financial institutions from others based on the type of loans they make?
In what markets are new financial instruments and securities created and sold?
In what markets are new financial instruments and securities created and sold?
What is a function of financial institutions mentioned in the text?
What is a function of financial institutions mentioned in the text?
What method do financial institutions use to attract deposits?
What method do financial institutions use to attract deposits?
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