Economic Chapter 10
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money
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anything that serves as a medium of exchange, a unit of account, and a store of value Ex: RMB
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medium of exchange
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anything that is used to determine value during the exchange of goods and services Ex: High market value in relation to volume and weight
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barter
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the direct exchange of one set of goods or services for another Ex: Money
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unit of account
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a means for comparing the values of goods and services Ex.unit of measure or currency used to value/cost goods, services, assets, liabilities, income, expenses
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store of value
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something that keeps its value if it is stored rather than spent Ex: Gold
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currency
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coins and paper bills used as money Ex: especially circulating banknotes and coins
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commodity money
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objects that have value in and of themselves and that are also used as money Ex: gold, silver, copper, salt, peppercorns
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representative money
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objects that have value because the holder can exchange them for something else of value Ex: especially circulating banknotes and coins
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specie
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coined money, usually gold or silver, used to back paper money Ex: Coins or other metal money in mass circulation
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fiat money
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objects that have value because a government has decreed that they are an acceptable means to pay debts Ex: gold ,silver
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bank
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an institution for receiving, keeping, and lending money Ex: key bank
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national bank
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a bank chartered by the federal government Ex: the National Bank is independent of state control, and is tasked with ensuring price stability.
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bank run
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a widespread panic in which many people try to redeem their paper money at the same time Ex. belts, shells, alcohol, cigarettes, cannabis, candy, cocoa beans
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greenback
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a paper currency issued during the Civil War Ex. a fiat currency issued during the American Civil War United States Note
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gold standard
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a monetary system in which paper money and coins had the value of certain amounts of gold Ex. a monetary system, Various
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central bank
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a bank that can lend to other banks in time of need Ex. a state's currency, money supply
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member bank
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a bank that belongs to the Federal Reserve System Ex. member of a bank, VIP
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foreclosure
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the seizure of property from the borrowers who repay their loans Ex. Judicial foreclosure
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money supply
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all the money available in the United States economy Ex.M0, M1, M2
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liquidity
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the ability to be used as, or directly converted into, cash Ex. business, economics or investment
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demand deposit
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money in a checking account that can be paid out \"on demand,\" or at any time Ex. funds held in demand deposit accounts in commercial banks.
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money market mutual fund
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a fund that pools money from small savers to purchase short -term government and corporate securities Ex.invests in short-term debt securities such as US Treasury bills and commercial paper.
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fractional reserve banking
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a banking system that keeps only a fraction of its funds on hand and lends out the remainder Ex. the risks of bank runs
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default
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failing to pay back a loan Ex. the failure to do something required by law
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mortgage
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a specific type of loan that is used to buy real estate Ex.Loan to value and down payments
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credit card
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a card entitling its owner to buy goods and services based on the owner's promise to pay for those goods and services Ex. education credit card, student credit card
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interest
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the price paid for the use of borrowed money Ex. Composition of interest rates
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principal
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the amount of money borrowed Ex. the head of a primary or secondary school
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debit card
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a card used to withdraw money from a bank account Ex. Online debit system Offline debit system Electronic purse card system Prepaid debit cards
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creditor
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a person or institution to whom money is owed Ex. person, organization, company, or government
