Review Questions 1
1. Explain the difference between representative money and fiat money.

Fiat money is money that is printed like paper money or coins. Representative, on the other hand, is different. It represents something of value. This could be checks or tokens.

2. Chart Skills Which are the three functions of money?
1. Medium of Exchange: This function is a trade between a buyer and a seller. The buyer could give food, tobacco, or money.
2. Unit of Amount: This function is measuring the value of something in its currency like money.
3. Store of Values: This function uses assets that can be saved, traded, and sold. It normally uses money, commodity, or any rare metals like gold or silver.

Review Questions 2
1. What is the purpose of the Federal Deposit Insurance Corporation
The purpose of it is to ensure customers’ deposits if any bank falls.

2. Chart Skills What events led to the creation of the Federal Reserve System?
Panic of 1907
1780’s Federalists And Antifederalists disagree about a banking system.
Civil War makes it clear the need for a better monetary system and banking system.