Chapter 10 Flashcards
Money
Anything that serves as a medium of exchange, a unit of account
Medium of exchange
Anything that is used to determine value during the exchange of goods and services
Barter
The direct exchange of one set of goods or services for another
Unit of account
Means for comparing the values of goods and services
Store of value
Something that keeps its value if it is stored rather than used
Currency
Coins and paper bills used as money
Commodity money
Objects that have value in themselves and that are also used as money
Representative money
Objects that have value because the holder can exchange them for something else of value
Fiat money
Money that has value because the government has ordered that it is an acceptable means to pay debt
Bank
An institution for receiving, keeping and leading money
National bank
A bank chartered, or license by the national government
Bank run
Widespread panic in which great numbers of people try to redeem their paper money
Greenback
Paper currency issued during the Civil War
Gold standard
A monetary system in which paper money and coins are equal to the value of a certain amount of gold
Federal reserve system
The nations central banking system
Central bank
Bank that can lend to other banks in times of need
Member bank
Bank that belongs to the Federal Reserve system
Federal reserve system
The national currency we use today in the United States
Great Depression
The severe economics decline that began in 1929 and lasted for more than a decade
Federal deposit insurance corporation (FDIC)
The government agency that ensures customer deposits if a bank fails
Money supply
All of the money available in the United States economy
Liquidity
The ability to be used as or directly converted to cash
Demand deposit
The money in checking accounts
Money market mutual fund
A fund that pools money from small savers to purchase short term government and corporate securities
Fractional reserve banking
A banking system that keeps only a fraction of funds on hand and lends out the remainder
Default
Failure to pay back a loan
Mortgage
A specific type of loan that is used to by real estate
Credit card
A card entitling its holder to buy goods and services, promise to pay back
Interest
Price paid for the use of borrowed money
Principal
Amount of money borrowed
Debit card
Card used to withdraw money
Creditor
Person or institution to whom money is owned
