Answers to Review Questions

Check to see how well you understood what you read.

  1. The signatures of the Secretary of the Treasury and the U.S. Treasurer appear on each Federal Reserve note.

  2. Andrew Jackson is on the $20 bill.

  3. The letter "K" represents the Dallas Federal Reserve Bank. Go to the Seal section if you don't remember which Banks match up with which cities.

  4. The U.S. protects its currency by:

    • Printing intricate lines in the border and in the portrait.

    • Using a special "heavy" type of paper.

    • Printing small red and blue threads in the bill.

    • Weaving a polyester thread with the letters USA and the bill's denomination inside the bill.

    • Microprinting the words "THE UNITED STATES OF AMERICA" around the portrait.

    • Printing with ink that never dries.

  5. You should contact the Secret Service or local police if you suspect you have a counterfeit bill.

  6. False, old currency won't be recalled to put new currency into circulation.

  7. False, the Bureau of Engraving and Printing is responsible for printing money.

  8. Representative money can be redeemed for commodities such as gold or silver — fiat money cannot.

  9. The three functions of money are:

    • medium of exchange

    • standard of value

    • store of value

  10. The Chinese were the first to use paper money.

  11. Seashells, beads, tea, fish hooks, fur, cattle, tobacco, etc. were all used as money. They were used because they were scarce and valuable.

  12. The system of money replaced barter.

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