civics chapter 19

Every type currency has three features. What are they?
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What is the difference between long and short term credit?Long term credit is used to buy cars and homes. Short term credit is used for appliances and repairing things.What can make it difficult to get a loan from a bank?poor / bad credit scoresHow did banks form?People began to carry their money to goldsmiths, who locked it in a safe for a small fee.what is collateralthe property that would be taken if you don't pay your debtWhat are the 4 types of bank accounts?1. checking 2. savings 3. CDS 4. money marketWhat are the four types of banks?1. commercial banks 2. savings and loans associations 3. savings banks 4. credit unionsWhat is the most common type of bank?commercial banksIn a commercial bank, each depositor is insured up to how much money?$250,000Commercial Banks are insured by what?If for some reason a bank is unable to give its depositor their money, these people will?an agency called the FDIC (federal deposit insurance company) - they will refund their deposits up to $250,000Why were savings and loans associations created?created in the mid 1800s to help people purchase homesHow did savings banks begin?Began in the early 1800s to encourage people who could make only a very small deposits to saveWhat are credit unions run by?by its membersHow does the fed regulate banks?by requiring that they keep a certain amount of money in reserveThe federal reserve system into how many districts?12The federal reserve system serves as two purposes. What are they?1. they handle the sale of bonds issued by the gov./currency put into circulation 2. provide various services to the state/national banks and control the banking systemThe federal reserve system is managed where?in Washington, DChow many members are on the federal reserve board?7 membersEach member of the federal reserve is appointed by who? How long is each term?President and 14 yearsWhat are two ways to save?1. saving accounts 2. CD (certificates of deposit)How do saving accounts work?1. Many Americans set aside an amount per week, month,etc in a savings account 2.The bank pays interest on all money deposited in a savings account 3.You may withdraw the money when it is neededHow does a CD workyou invest a certain amount of money, for a specified period of time . Usually the longer the money is invested, the higher the interest paid on the CD. Unfortunately, if you withdraw your money before the time period ends, you have to pay a penaltyWhat are some ways to invest1. bonds 2. stocks 3. mutual funds 4. money market fundswhat are bondsa certificate of debt issued by governments and corporations to people who lend them moneywhat are mutual fundsreduces the amount of risk in stock purchases. By purchasing a mutual fund you own a small piece of a large number of stockswhat are stocksa share of ownership in a corporation. If you participate in the stock market you are taking a chance. Stock prices depend on number of market fundsshort term bonds that have a stable value, ensuring that you will at least get back the same amount of money you investedhe money people have in savings, bonds, stocks in used to help expand?the US economyWhat ensures all offerings of stocks/bonds on the country's stock exchanges include accurate info about the company so the purchasers will not be misledSecurities and Exchange CommissionThe amount of money you pay for insurance is called forpremiumThe contract that gives you this protection (insurance) is a(n)insurance policyWhat are the four types of insurance1. life 2. disability 3. health 4. propertyWhat are the two types of life insuranceterm (only covers a specified time period) and whole life (last a lifetime)what is disability insuranceprovides payments to replace lost wages when the policyholder cannot work due to a total/partial disabilitywhat is health insurancecovers medical/hospital expenses. Often paid by you or your employer.what is life insurancepurpose is to provide the policyholder's family with money in the event that the policyholder dies. This protects the family from financial hardship. The person named in the policy to receive the money is beneficiary.what is property insurancepurpose is to provide the policyholder's family with money in the event that the policyholder dies. This protects the family from financial hardship. The person named in the policy to receive the money is beneficiary.What is the insurance paid for by the governmentSocial securityWhere are stocks soldStock exchangeWhat are the three major parts of social securty1. Old age and survivors insurance 2. Disability 3. Unemployment compensation oWhy has social security become a problem?Americans are beginning to live longer