Name __Lauren Sutherland___Chapter 201. What are the five characteristics of useful money?Five characteristics useful money is portability, divisibility, stability, durability, and uniqueness. 2. What is the money supply, and why is it important?Money supply is the amount of money the Federal Reserve makes available for people. It is important guide in the conduct of monetary policy.3. How does the Federal Reserve control the money supply?How the Federal Reserve controls the money supply is by increasing or decreasing the monetary base. The monetary base is related to the sixe of the Fed’s balance sheet.4. What are the major functions of the Federal Reserve? What other functions does it perform?The major functions of the Federal Reserve is to provide a stable monetary and financial system. Some other functions the Federal Reserve performs is they supervise and regulating banking institutions and protecting the credit rights of consumers.5. What’s the difference between a bank, a savings and loan association, and a credit union?The difference between a bank, savings and loan association, and credit union is that a bank offers entire range of banking services, savings and load association offer interest bearing accounts, and credit union members only not for profit organization. 6. What are some of the causes for the banking crisis that began in 2008?Some causes for the banking crisis that began in 2008 was mainly by deregulation in the financial industry that permitted banks to engage in hedge fund trading with derivatives. Banks then demanded more mortgages to support the profitable sales of these derivatives. They created interest only loans that were affordable to subprime borrowers.7. What is the role of the FDIC?The role of FDIC is to provide stability to the economy and the failing banking system. 8. How does a debit card differ from a credit card?A debit card the money comes directly from your checking account, while a credit card the purchase is charged to a line of credit which is billed later.9. What is the World Bank and what does it do?The World bank is an international financial institution that provides loans to countries of the world for capital programs. It comprises two institution, the International bank of Reconstruction and Development and the International Development Association10. What is the IMF and what does it do?IMF stands for International Monetary Fund, which promotes international financial stability and monetary cooperation. It also facilitates international trade, promotes employment and sustainable economic
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