| A | B |
|---|
| Which type of financial institution is most important in the American economy? | commercial banks |
| How do banks make a profit? | charging interest to borrowers |
| What do individuals buy to protect their property and assets from accidents and liability? | insurance |
| Where do banks acquire the money that they use to make loans? | deposits |
| Which government agency insures individuals' bank deposits | Federal Deposit Insurance Corporation (FDIC) |
| What forms of money are considered to be "legal tender"? | currency (notes and coins) |
| What is an item of value called that is pledged in order to secure a loan? | collateral |
| What figure is used to inform a borrower of the total annual percentage cost of a loan or other form of credit? | annual percentage rate (APR) |
| What form of money can be used to purchase something now and pay for it later on a monthly basis? | credit |
| What type of financial institution exists to provide services only to depositors who are members? | credit union |
| What is the disadvantage of using credit? | increased debt |
| What is it called when a nation experiences a long and severe recession? | depression |
| What do payroll taxes pay for? | Social Security and Medicare |
| What is the primary source of revenue for the federal government? | personal income taxes |
| Who pays the most in federal income taxes? | people with higher incomes |
| Who is affected the most by sales taxes? | people with low incomes |
| What type of tax is hidden in the price of a good such as alcohol, tobacco, or gasoline? | excise tax |
| What is measured by per capita GDP? | standard of living |
