Chapter 14: Money and Banking Flashcards
Medium of exchange
Use of money for exchange for goods or services
Barter
Exchange of goods and services for other goods and services
Unit of accounting
Use of money as a yardstick for comparing the values of goods and services in relation to one another
Store of value
Use of money to store purchasing power for later use
Commodity money
A medium of exchange such as cattle or gems that has value as a commodity or good aside from its value as money
Representative money
Money that is backed by an item of value, such as gold or silver
Fiat money
Money that has a value because a government fiat, or order, had established it as acceptable for payment of debts
Legal tender
Money that by law must be accepted for payments of public and private debts
Overdraft checking
Checking account that allows a customer to write a check for more money than exists in his or her account
EFT electronic funds transfer
System of transferring funds from one bank account directly to another without any per money changing hands
ATM automated teller machine
Unit that allows consumers to do their banking without the help of a live teller
Checking account
Account in which deposited funds can be withdrawn at any time by presenting a check
Thrift institutions
Mutual savings banks, S&Ls, and credit unions that offer many of the same services as commercial banks
Debit card
Device used to make cashless purchases; money is electronically withdrawn from the consumer’s checkable account and transferred directly to the store’s bank account
Near moneys
Assets, such as savings accounts, that can be turned into money relatively easily and without the risk of loss of value
