Problem 4
What is the difference between a national bank and a state bank?
Problem 5
How did the FDIC make fractional reserve banking less risky for consumers?
Problem 5
What aspect of fiat money allows it to have more stability than representative money?
Problem 5
How are debit cards related to automated teller machines?
Problem 7
Over the course of one year, Hometown Bank paid Mary Lee 3 percent interest on a 1,000 dollars deposit and charged Owen's Bakery 8 percent interest on a \(\$ 900\) loan. How much net income did Hometown bank make? Show your calculations.
Problem 7
Which of these forms of money are included in \(\mathrm{M} 1\): \(\bullet\)checking accounts \(\bullet\)coins \(\bullet\)money market accounts \(\bullet\)paper money \(\bullet\)savings accounts \(\bullet\)time deposits \(\bullet\)traveler's checks \(\bullet\)NOW accounts
Problem 8
On the basis of what you learned about the history of U.S. banking in the 19 th and 20 th centuries, were Alexander Hamilton's ideas about the need for a central bank and a national currency shown to be mostly accurate? Cite specific examples to support your answer.
Problem 9
Maria's parents told her that for the ten years prior to her high school graduation, they saved 200 dollar per month for her college education - 24,000 dollar (plus interest). Which function of money does this example best illustrate? Why?
Problem 9
Suppose that Mariel deposits \(\$ 100\) in her local bank. If the Fed's reserve requirement is 15 percent, how much can the bank loan out on the basis of Mariel's deposit? What concept does this scenario illustrate?
Problem 9
Some parents think that allowing teenagers to use a debit card prepares them for using a credit card. What are the possible reasons behind this thinking? Do you think this reasoning is sound? Why or why not?
