Chapters 14-15 Flashcards
use of money as a yardstick for comparing the values of goods and services
unit of accounting
12-member committee in the Federal Reserve System
Open market committee
credit device used to make cashless purchases of goods and services
credit card
includes all M1, plus such near moneys as money market mutual fund balances and Eurodollars
M2
mediums of exchange such as cattle and gems that have value as a commodity
commodity money
money deposited in a bank that can be withdrawn at any time
demand deposits
interest rate the Fed charges on loans to banks
disocunt rate
consists of money that can be spent immediately and against which checks can be written
M1
money that has value because a government fiat has established it
fiat money
rate of interest banks charge on loans to their best business customers
prime rate
money that must by the law be accepted for payment of public and private debts
legal tender
Federal Reserve System created by Congress in 1913
The Fed
monetary policy that makes credit inexpensive and abundant
loose money policy
exchange of goods and services for other goods and services
barter
use of money in exchange for goods or services
medium of exchange
manner in which a nation assigns value to its money
monetary standard
policy that involves changing the rate of growth of the supply of money in circulation
monetary policy
money deposited in a bank that can be withdrawn at any time by presenting a check
checkable deposits
method by which a check that has been deposited in one depository institution
check clearing
buying and selling of U.S. securities by the Fed to affect the money supply
open market operations
checking account that allows a customer to write a check for more money than exists in the account
overdraft checking
money not valuable in itself for non-money uses
representative money
system in which only a fraction of the deposits in a bank is kept on hand
fractional reserve banking
anything customarily used as a medium of exchange, unit of accounting, and a store of value
money
use of money to store purchasing power for later use
store of value
regulations set by the Fed requiring banks to keep a fraction of their money on deposit
reserve requirements
monetary policy which makes credit expensive and in short supply in an effort to slow the economy
tight money policy
mutual savings bank, savings and loan associations
thirft institutions
assets, such as savings accounts, that can be turned into money
near money
