MACRO L7 - Money and Banking (X) Flashcards
what are the 3 main functions of money
- medium of exchange
- store of wealth
- unit of account
define medium of exchange
money is acceptable in exchange for goods and services
define store of wealth
money holds its value over time
define unit of account
money allows the value of goods, services and assets to be compared
what are the 4 attributes of money
- durability - withstands repeated usage
- divisibility - come in a number of denominations
- transportability - light enough to be carried around
- noncounterfeitability - hard to forge
what do financial intermediaries do
channel funds from depositors to borrowers
what are MFI’s
MONETARY FINANCIAL INSTITUTIONS
deposit-taking institutions including banks, building societies, and the Bank of England
what do retail banks do
retail deposits and loans to individuals and businesses
what do wholesale banks do
wholesale deposits and loans to individuals and businesses
what do universal banks do
conduct retail and wholesale banking
what is financial deregulation
removal/reduction in legal rules and regulations governing the activities of financial institutions
