chapter 14 Flashcards
any object generally accepted as payment for goods and services
money
used to trade goods and services
medium of exchange
can be used for future purchases
store of value
allows measurement of the relative value of goods and services
unit of account
buyers and sellers must agree on the value of money
the spendable money supply
the most liquid forms of money
M-1 money supply
paper money and coins issued by the Canadian Government
Currency
money in chequing accounts which can be transferred to others by cheque
demand deposits
an order instructing the bank to pay a given sum to a person or firm
cheque
deposit requiring prior notice before withdrawal of funds
time deposits
pooled assets from many investors invested in short-term, low risk financial securities
money market mutual funds
saving account holdings
savings deposits
privately owned, profit-oriented, financial intermediary
chartered banks
major source of short-term financing
bank loans
safeguard funds and estates entrusted to them
trust companies
cooperative savings and lending institutions formed by a group of individuals with common interests
credit unions
company that shares risks with policy holders for payment of premiums
life insurance companies
buy uncollected accounts receivables from a firm for less than face value
factoring companies
finances instalment purchases made by individuals or businesses
sales finance company
makes personal loans to consumers
consumer finance company
fund new or expanding firms that have great potential
venture capital firms
accumulate cash that will be paid out to subscribers in the future in the form of pension income
pension funds
stockbrockers or underwriters are the primary distributors of new stock and bond issues
investment dealers
influence the willingness to invest abroad and buy impor
exchange rates and international trade
identical products should sell for the same price in all countries
the law of one price
illustrates the concept of over and undervalued currencies
the big mac currency index
international banking is governed by a network of loose agreements between countries
international bank structure
UN agency that funds infrastructure projects in developing countries
World Bank
collects money from member nations and lends it to others
International Monetary Fund
