1. When two people agree to trade items that are each worth $10, they can do so because money is used as a ___.

a. medium of exchange b. standard of value c. store of value

2. If you decide to save part of your pay each month to buy something later, you can do so because money is used as a ___.

a. medium of exchange b. standard of value c. store of value

3. Money a person leaves with a bank to earn interest is a ___.

a. checking account b. savings account c. standard of value

4. The most serious problem with money early in United States history was that it lacked ___.

a. durability b. divisibility c. stability

5. When you buy on credit and pay part of the cost in cash, the part you pay in cash is called a ___. a. loan b. down payment c. time deposit

6. Banks make a profit by charging ___ interest on loans than they pay on deposits.

a. more b. less c. the same 7. One job of the Federal Reserve System is to ___.

a. clear checks b. open businesses c. print money

8. When the Federal Reserve System wants to encourage people to spend money, it follows a policy of ___.

a. tight money b. easy money c. reserve requirement

9. If people are losing their jobs and cutting spending, and businesses are cutting back production, it is likely the Federal Reserve System is following a policy of ___.

a. tight money b. easy money c. reserve requirement

10.If you have your money in a bank that fails, chances are you will get it all back, thanks to the ___.

a. Federal Reserve System b. Bank of the United States c. Federal Deposit Insurance Corporation