GED and HiSET social studies — money, banks and the Federal Reserve

The economics material already in this category covers markets: supply and demand, prices, taxes, GDP, tariffs. This one covers what the GED lists alongside them — government and the economy, money and banking, and consumer economics — the part of the subject most adults meet every month in a bank statement, a credit card offer or a news story about interest rates.

The twelve questions move from the everyday to the national and back. They begin with what money actually does (medium of exchange, store of value, unit of account) and how a bank makes money by lending out deposits at a higher rate than it pays, with the FDIC's insurance limit of 250,000 dollars per depositor, per insured bank, per ownership category. Then the Federal Reserve: what raising its target for the federal funds rate is meant to do to borrowing and inflation, and which tools it uses today — open market operations, interest on reserve balances and the discount rate (reserve requirements have been set at zero since 2020). A classification item separates fiscal policy, set by Congress and the President through spending and taxes, from monetary policy, set by the Federal Reserve.

The national picture continues with the business cycle, where rising unemployment and falling output mark a contraction, and the difference between one year's budget deficit and the accumulated national debt. Trade gets a worked example: two countries, two goods, output per worker-day, and the opportunity-cost arithmetic that shows why the country better at everything still gains by specializing.

The consumer questions are calculations and judgments an adult actually makes: a credit utilization rate, simple against compound interest on a deposit over two years, what an APR includes, and the warning signs of predatory lending. Every explanation shows the arithmetic, and money is written out in words throughout.

The flashcards cover nineteen terms, from medium of exchange to FDIC. The written work asks for fuller answers: how the Federal Reserve responds to inflation and to a recession, how fiscal policy works in a downturn, how a credit score is built, a compound-interest calculation, a comparative-advantage table, and the arguments for and against running deficits stated as each side makes them. The oral exam asks you to explain one mechanism at a time in your own words.

Nothing here is financial advice. Zestly is an independent study tool, not affiliated with GED Testing Service or the HiSET program.

• Apply the three functions of money and explain how banks earn income and what deposit insurance covers
• Explain what the Federal Reserve does when it raises or lowers interest rates, and name its main tools
• Tell fiscal policy from monetary policy and say who carries out each
• Identify the phases of the business cycle and distinguish a budget deficit from the national debt
• Compute a credit utilization rate and compare simple and compound interest
• Work out comparative advantage from production figures and explain APR and predatory lending warning signs

Practice material written by Zestly, based on the published description of the GED Social Studies test (economics: government and the economy, money and banking, consumer economics) and the HiSET Social Studies subtest. Deposit-insurance and Federal Reserve facts as published by the FDIC and the Federal Reserve Board (2026).