Money – Essay Writing – Flashcards
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Federal Reserve System
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1913 - central banking system of the US - created by the Federal Reserve Act - quasi public system
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Federal Reserve Notes
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The paper money used in the United States
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Barter Economy
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Moneyless economy that relies on trade or barter
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Commodity Money
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Objects that have value in themselves and that are also used as money
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Fiat Money
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Money that has value because the government has ordered that it is an acceptable means to pay debts
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Specie money
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Money in the form of gold or silver coins
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Monetary Unit
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Standard unit of currency in a country's money supply
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Medium of exchange
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Function of money or other substance generally accepted as payment for goods and services
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Measure of value
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A function of money that allows it to serve as a common way to express value
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Store of value
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A function of money that allows people to preserve value for future use
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Demand deposit account
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Account from which funds can be removed by writing a check in without having to gain prior approval from the depository institution
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M1
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Narrowest measure of the money supply that includes all coins and paper bills in circulation, traveler's checks, checking account balances, and balances in credit unions
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M2
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All of M1 + less immediate (liquid) forms of money to include savings, money market mutual funds, and small denomination time deposits.
