Chapter 9 Flashcards
Unit of account
It means of comparing the values of goods and services
Durability
Must withstand the physical wear and tear that comes with being used over and over
Portability
Must be able to take the money wherever easily
Diverse ability
Must be easily divided into smaller unity
Uniformity
Must be the same in terms of what they could buy and people must be able to count it accurately
Limited supply
Can’t just be made or found
Acceptability
Everyone in an economy must be able to exchange the currency for goods and services
Characteristics of money
Durable portable easy to divide uniform limited supply and is easily excepted
Commodity money
Objects that have value in themselves and that are also used as money. Ex: Salt cattle and precious stones
Representative money
Objects that have value because the holder can exchange them for something else of value. Example mom coupons
Flat money
Money that has value because the government has ordered that it is an acceptable means to pay debt
Federal reserve system
The nations central banking system
Members bank
Banquet that belongs to the Federal Reserve system
Federal Reserve board
Federal Reserve Banks are supervised by the board and the president of the United States is the head
Short-term loans
Bank members to borrow money to me short-term demands
