Chapter 13 Flashcards
Medium of exchange
Any item that is used to effect a purchase or a sale
Money
Anything that is generally accepted as final payment for goods and services
Double coincidence of wants
A situation in which a buyer finds a seller who has what the buyer wants and who wants what the buyer has
Unit of account or measure of value
The common unit for expressing the value of goods and services
Store of value or store of wealth
Money or other assets put away for future use
Liquidity
The ease with which an asset can be converted into cash with minimal loss
Currency or hand-to-hand money
The notes and coins that serve as a country’s medium of exchange
Token money
Money whose face value exceeds its commodity value
Flat money
Legal tender money that is not backed by gold or any other precious metal
Legal tender
Money that must legally be accepted if offered as a payment to settle debt
Good money
Money whose face value equals it’s commodity value
Bad money
Money whose face value exceeds its commodity value
Gresham’s law
The hypothesis that bad money will drive good money out of circulation
Chequing accounts
Bank deposits that are transferable by cheques
Demand deposits
Bank deposits that can be withdrawn without prior notice
Notice deposits
Interest-earning deposits subject to notice before withdrawal
Near money
Highly liquid assets that can be easily converted into currency or demand deposits without any appreciable loss of value
Monetary aggregates
Different measures of the money supply
Payments system
A set of arrangements that facilitate the exchange of goods and services
Automated teller machines (ATMs)
Banking machines that facilitate transactions electronically
Electronic funds transfer system (EFTS)
A system whereby funds can be transferred instantly between accounts
Debit card
Cards that electronically transfer funds from the customer’s account to the merchant’s account
