Economics Chapter 10 Test Answers – Flashcards
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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
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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
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barter
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the direct exchange of one set of goods
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unit of account
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a means for comparing the values of goods and services
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store of value
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something that keeps its value if it is stored rather than spent
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currency
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coins and paper bills used as money
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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
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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
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specie
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coined money, usually gold or silver, used to back paper money
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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
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money supply
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all the money available in the
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liquidity
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the ability to be used, or directly converted into, cash
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demand deposit
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money in a checking account
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money market mutual fund
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a fund that pools
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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
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default
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failing to pay back a loan
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mortgage
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a specific type of loan that is used to buy real estate
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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
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interest
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the price paid for the use of borrowed money
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principal
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the amount of money borrowed
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debit card
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a card used to withdraw money from a bank account
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creditor
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a person or institution to whom money is owed
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bank
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an institution for receiving, keeping, and lending money
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national bank
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a bank chartered by the federal government
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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
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greenback
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a paper currency issued during the Civil War
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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
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central bank
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a bank that can lend to other banks in times of need
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member bank
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a bank that belongs to the Federal Reserve System
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foreclosure
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the seizure of property from lenders who are unable to pay back theirloans
