Details Title: 1051H Chapter 29 Description: Gregory Mankiw Textbook Definitions. Jeffrey Milyo's Class Total Flash Cards: 22 Created: 11/05/2008 08:55:26		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Economics Flashcards
Cards in this set: Term fiat money Definition money without intrinsic value that is used as money because of a government decree (paper money) Term currency Definition the paper bills and coins in the hands of the public Term Federal Reserve (Fed) Definition the central bank of the United States Term central bank Definition an institution designed to oversee the banking system and regulate the quantity of money in the economy Term money supply Definition the quantity of money available in the economy Term monetary policy Definition the setting of the money supply by policymakers in the central bank Term reserves Definition deposits that banks have received but have not loaned out Term fractional-reserve banking Definition a banking system in which banks hold only a fraction of deposits as reserves Term reserve ratio Definition the fraction of deposits that banks hold as reserves Term money multiplier Definition the amount of money the banking system generates with each dollar of reserves Term open-market operations Definition the purchase and sale of U.S. government bonds by the Fed Term reserve requirements Definition regulations on the minimum amount of reserves that banks must hold against deposits Term discount rate Definition the interest rate on the loans that Fed makes to banks Term money Definition the set of assets in an economy that people regularly use to buy goods and services from other people Term medium of exchange Definition an item that buyers give to sellers when they want to purchase goods and services Term unit of account Definition the yardstick people use to post prices and record debts Term store of value Definition an item that people can use to transfer purchasing power from the present to the future Term liquidity Definition the ease with which an asset can be converted into the economy's medium of exchange Term commodity money Definition money that takes the form of a commodity with intrinsic value (gold) Term three functions of money Definition medium of exchange, unit of account, and store of value Term fiat money Definition money without intrinsic value that is used as money because of government decree Term currency Definition the paper bills and coins in the hands of the public