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25 Cards in this Set
- Front
- Back
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Medium of exchange |
Money that is usable for buying and selling goods and services |
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Unit of account |
Money aids rational decision making by enabling buyers and sellers to easily compare/ define the prices of various goods, services, and resources |
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Store of value |
Money that enables people to tranfer purchasing power from present to future |
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M1, M2, M3 |
M1: coins/paper money and checkable deposits M2: M1 + noncheckable savings accounts, small time deposits, and individual money market mutual fund balances M3: M2 + large time deposits |
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Token money |
All coins in circulation in the US |
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Federal Reserve Notes |
All the paper curreny |
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Checkable deposits |
Any deposit in a commercial bank or thrift institution against which a check may be written |
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Commercial banks |
A firm that engages in the business of banking, primary depository institutions |
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Thrift institutions |
Savings and loan association, mutual savings bank, or credit union |
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Near-monies |
Highly liquid financial assets that do not function directly or fully as a medium of exchange but can be readily converted into currency or checkable deposits |
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Savings account |
An account to store (save) money and can be easily withdrawn at a bank |
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Money market deposit account (MMDA) |
Interest-earning accounts at banks, which pool the funds of the depositors to buy various short-term securities |
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Time deposits |
Funds that become available at their maturity |
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Money market mutual fund (MMMF) |
Interest-bearing accounts offered by investment companies, which pool depositors' funds for the purchase of short-term securites |
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Legal tender |
A legal designation of a nation's official currency (bills and coins) |
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Transactions demand |
Demand for money as a medium of exchange |
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Asset demand |
Demand of money as a store of value |
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Total demand for money |
(Dm) The sum or transaction demand and asset demand and is a downsloping line |
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Money market |
Combination of demand for money and supply of money and determine the equalibrium rate of interest |
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Federal Reserve System |
Control the lending activity of the nation's banks and thrift institutions |
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Board of Governors |
Seven members; central authority of the US money and banking system |
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Federal Open Market Committee (FOMC) |
Twelve members; aids the Board of Governors in conducting monetary policy |
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Federal Reserve Banks |
Blend private and public control, collectively serve as the nation's "central bank" (banker's bank) |
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Financial services industry |
Other institutions that hold money |
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Electronic transactions |
Using the internet to buy goods, buying and selling stock and mutal fund shares, transferring bank funds, and paying bills |
