NJVS Personal Financial Literacy Unit 1.1

Questions and Answers

What are synonyms for 'money'?

Expense

Income (correct)

Wealth (correct)

Profit (correct)

What is money?

A medium of exchange that facilitates trade and can be used to purchase goods and services.

What was the first form of money?

Coins of fixed weight and value minted in Turkey by Lydians.

What is paper money?

Legal currency issued on paper. Signup and view all the answers

What is commodity money?

A good used as money that has value independent of its use as money. Signup and view all the answers

What is representative money?

Money that is backed by an item of value, such as gold or silver. Signup and view all the answers

What was the Gold Standard?

A monetary system where currencies were converted based on their value in gold. Signup and view all the answers

The Gold Standard was modified or abandoned during _______________

The Great Depression Signup and view all the answers

What is a floating exchange rate?

A system where the exchange rate for converting one currency into another is continuously adjusted. Signup and view all the answers

Today, gold and silver are considered ____ rather than forms of .

valuable assets, money Signup and view all the answers

What is electronic money (e-money)?

Money that exists only in electronic form. Signup and view all the answers

What is EFT (Electronic Funds Transfer)?

Money transferred from one account to another electronically. Signup and view all the answers

Examples of EFT include:

Direct deposit, using credit or debit cards, online bill payments. Signup and view all the answers

What is NASDAQ?

A nationwide electronic system for buying and selling securities. Signup and view all the answers

How did people trade before money was developed?

People used a barter system. Signup and view all the answers

Who is credited historically as the first people to use coins?

Lydians. Signup and view all the answers

What are greenbacks?

The nickname for the first US paper money. Signup and view all the answers

When did paper currency appear in Europe?

Around the 17th Century. Signup and view all the answers

Today, US currency is based on the Gold Standard.

False Signup and view all the answers

Which describes the US Federal Reserve?

Responsible for U.S. monetary policy and managing currency distribution. Signup and view all the answers

In the United States, coins are minted by which agency?

United States Mint. Signup and view all the answers

In the United States, paper money is printed by which agency?

The Bureau of Engraving and Printing. Signup and view all the answers

What is unique about paper money in the United States?

Each bill is assigned a unique serial number. Signup and view all the answers

How does U.S. currency get into circulation?

Through the Federal Reserve mandating and distributing money. Signup and view all the answers

Study Notes

Money Fundamentals

Synonyms for money include income, profit, and wealth.
Money serves as a medium of exchange, allowing trade for goods and services, represented by currency in forms like coins and paper bills.

Historical Context

The first form of money were coins minted by Lydians in Turkey, around 3,000 years ago, valued based on their metal content.
Paper money emerged in China around 910 A.D. as a more convenient alternative to metal coins.
Commodity money holds intrinsic value beyond its use as currency; for example, gold and silver in coins retain their own worth.

Forms of Money

Representative money is linked to an underlying asset, such as gold or silver.
The Gold Standard allowed currency conversion based on gold value; however, it was modified during the Great Depression.
Today, gold and silver are considered valuable assets, not as direct forms of money.

Modern Monetary Systems

The floating exchange rate adjusts currency value based on supply and demand factors, first implemented by President Nixon.
Electronic money (e-money) or digital cash refers to money existing only in electronic form.
Electronic Funds Transfer (EFT) enables automated monetary transfers without manual processes.

Practical Applications of EFT

Examples include direct deposit paychecks, credit card transactions, ATM usage, store gift cards, and online payments.

Trading and Coinage

Before the invention of money, trade operated on a barter system.
Lydians are recognized as the earliest coin users.
Greenbacks refer to the first U.S. paper money, appearing around the 17th century in Europe.

U.S. Currency Insights

Current U.S. currency is not based on the Gold Standard.
The U.S. Federal Reserve manages monetary policy, currency distribution, and banking processes.
The United States Mint is responsible for coin production, while the Bureau of Engraving and Printing handles paper currency.
Each U.S. bill has a unique serial number for identification purposes.
Currency circulation involves the Fed mandating distribution, transitioning money from the Bureau to banks and ATMs.

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Description

Explore the fundamentals of money in this flashcard quiz from NJVS Personal Financial Literacy Unit 1.1. Learn about different synonyms for money, its definition, and the historical significance of the first coins. This quiz will enhance your understanding of money as a medium of exchange.