Flashcards on Money and Banking

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What is the function of money in an economy?

Money serves as a medium of exchange, a unit of account, and a store of value in an economy.

What are the two main types of banks?

The two main types of banks are commercial banks and central banks.

What is the purpose of a central bank?

The purpose of a central bank is to manage a country's money supply, control inflation, and supervise the banking system.

What is monetary policy?

Monetary policy refers to the actions taken by a central bank to manage and control the money supply and interest rates in an economy.

What is a checking account?

A checking account is a type of bank account that allows depositors to withdraw funds and make payments by writing checks or using a debit card.

What is a savings account?

A savings account is a type of bank account that allows individuals to deposit money, earn interest, and withdraw funds when needed.

What is the difference between a debit card and a credit card?

A debit card allows users to spend money by drawing on funds they already have in a bank account, while a credit card allows users to borrow money from the card issuer up to a certain credit limit.

What is inflation?

Inflation refers to the increase in prices of goods and services over time, resulting in the decrease in the purchasing power of money.

What is a mortgage?

A mortgage is a loan provided by a bank or financial institution to help individuals purchase a home, where the property serves as collateral for the loan.

What is a recession?

A recession is a period of temporary economic decline characterized by a decrease in economic activity, often measured by a decline in GDP for two consecutive quarters.

What is the Federal Reserve System?

The Federal Reserve System, also known as the Fed, is the central banking system of the United States responsible for conducting monetary policy and regulating the banking industry.

What is compound interest?

Compound interest is the interest calculated on the initial principal as well as the accumulated interest from previous periods. It can significantly increase the value of an investment over time.

What is a budget?

A budget is a financial plan that outlines an individual's or organization's income and expenses over a certain period of time, typically monthly or annually.

What is the role of the World Bank?

The World Bank is an international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.

What is a stock?

A stock, also known as a share or equity, represents ownership in a company and provides the holder with a claim on part of the company's assets and profits.

What is a bond?

A bond is a fixed income instrument where an investor lends money to a borrower, typically a government or corporation, in exchange for periodic interest payments and the return of the principal amount at maturity.

What is the function of money in an economy?

Money serves as a medium of exchange, a unit of account, and a store of value in an economy.

What are the two main types of banks?

The two main types of banks are commercial banks and central banks.

What is the purpose of a central bank?

The purpose of a central bank is to manage a country's money supply, control inflation, and supervise the banking system.

What is monetary policy?

Monetary policy refers to the actions taken by a central bank to manage and control the money supply and interest rates in an economy.

What is a checking account?

A checking account is a type of bank account that allows depositors to withdraw funds and make payments by writing checks or using a debit card.

What is a savings account?

A savings account is a type of bank account that allows individuals to deposit money, earn interest, and withdraw funds when needed.

What is the difference between a debit card and a credit card?

A debit card allows users to spend money by drawing on funds they already have in a bank account, while a credit card allows users to borrow money from the card issuer up to a certain credit limit.

What is inflation?

Inflation refers to the increase in prices of goods and services over time, resulting in the decrease in the purchasing power of money.

What is a mortgage?

A mortgage is a loan provided by a bank or financial institution to help individuals purchase a home, where the property serves as collateral for the loan.

What is a recession?

A recession is a period of temporary economic decline characterized by a decrease in economic activity, often measured by a decline in GDP for two consecutive quarters.

What is the Federal Reserve System?

The Federal Reserve System, also known as the Fed, is the central banking system of the United States responsible for conducting monetary policy and regulating the banking industry.

What is compound interest?

Compound interest is the interest calculated on the initial principal as well as the accumulated interest from previous periods. It can significantly increase the value of an investment over time.

What is a budget?

A budget is a financial plan that outlines an individual's or organization's income and expenses over a certain period of time, typically monthly or annually.

What is the role of the World Bank?

The World Bank is an international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.

What is a stock?

A stock, also known as a share or equity, represents ownership in a company and provides the holder with a claim on part of the company's assets and profits.

What is a bond?

A bond is a fixed income instrument where an investor lends money to a borrower, typically a government or corporation, in exchange for periodic interest payments and the return of the principal amount at maturity.

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