AP Macroeconomics [CH. 13] Vocabulary – Mr. Karavedas’ Class (SHHS) – Flashcards

Any item sellers generally accept and buyers generally use to pay for a good or service; money; a convenient means of exchanging goods and services without engaging in barter.

A standard unit in which prices can be stated and the value of goods and services can be compared; one of the three functions of money.

An asset set aside for future use; one of the three functions of money.

The most narrowly defined money supply, equal to currency in the hands of the public and checkable deposits of commercial banks and thrift institutions.

A more broadly defined money supply, equal to M1 plus non-checkable savings accounts (including money market deposit accounts), small time deposits (deposits of less than $100,000), and individual money market mutual fund balances.

A very broadly defined money supply, equal to M2 plus large time deposits (deposits of $100,000 or more).

Coins having a face value greater than their intrinsic value.

Paper money issued by the Federal Reserve Banks.

Any deposit in a commercial bank or thrift institution against which a check may be written.

A firm that engages in the business of banking (accepts deposits, offers checking accounts, and makes loans).

A savings and loan association, mutual savings bank, or credit union.

Financial assets, the most important of which are non-checkable savings accounts, time deposits, and U.S. short-term securities and savings bonds, which are not a medium of exchange but can be readily converted into money.

A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.

Interest-earning accounts at banks and thrift institutions, which pool the funds of depositors to buy various short-term securities.

An interest-earning deposit in a commercial bank or thrift institution that the depositor can withdraw without penalty after the end of a specified period.

Interest-bearing accounts offered by investment companies, which pool depositors' funds for the purchase of short-term securities. Depositors may write checks in minimum amounts or more against their accounts.

Anything that government says that must be accepted in payment of a debt.

The amount of money people want to hold for use as a medium of exchange (to make payments); varies directly with the nominal GDP.

The amount of money people want to hold as a store of value; this amount varies inversely with the interest rate.

The sum of the transactions demand for money, and the asset demand for money.

The market in which the demand for and the supply of money determine the interest rate (or the level of interest rates) in the economy.

Created by the Federal Reserve Act of 1913 during Pres. Wilson's 1st term. These 12 banks chartered by the U.S. government to control the money supply (monetary policy), control lending activity, and assure the stability of the banking system. (OR): central bank--an institution that oversees and regulates the banking system and controls the monetary base (12 banks) (Def. from book): the Board of Governors control the 12 Fed. banks, and the 12 Federal Reserve Banks then control the lending activity of the nation's banks and thrift institutions.

The central authority of the U.S. money and banking system. (The Board directs the activities of the 12 Federal Reserve Banks.) They make the basic policy decisions that provide monetary control of the U.S. money and banking systems. These decisions are implemented through the 12 Federal Reserve Banks.

The 12-member group that determines the purchase and sale policies of the Federal Reserve Banks in the market for U.S. government securities.

Collectively serve as the nation's "central bank." They blend private ownership and public control, and mainly are so-called bankers' banks. (From back of the book): The 12 banks chartered by the U.S. government to control the money supply and perform other functions.

Financial Services is a term used to refer to the economic services provided by the finance industry. Financial Services is also the term used to describe organizations that deal with the management of money. Examples are the Banks, investment banks, insurance companies, credit card companies and stock brokerages. For example, some major U.S. Financial Institutions are: 1) Commercial Banks (Chase) 2) Thrifts (deals with savings and loans) 3) Insurance Companies (State Farm) 4) Mutual Fund Companies (Kemper) 5) Pension Funds (Retirement Equity Funds) 6) Securities Firms (Leyman Brothers)

The buying of goods, buying and selling of stock and mutual fund shares, transferring bank funds between accounts, and paying bills by using credit cards, or using the Internet.