Module 23 Flashcards
money
anything that is generally acceptable in the exchange for goods and services
currency in circulation
actual cash held by the public
checkable bank deposits
bank accounts on which people can write checks
money supply
total value of financial assets in the econ that are considered money
3 roles of money
1) medium of exchange
2) store of value
3) unit of account
commodity money
a good used as a medium of exchange that has intrinsic value in other uses
commodity-backed money
a medium of exchange with no intrinsic value whose ultimate value is guaranteed by a promise that it can be converted into valuable goods
fiat money
a medium of exchange whose value derives entirely from its official status as a means of payment
money aggregate
overall measure of the money supply
ex: M1, M2
M1
money= only currency in circulation + travelers checks + checkable bank deposits
M2
money = M1 + near moneys (savings accounts, CD’s, time deposits, money market funds)