Details Title: Ch 10:Money & Monetary System Description: Unit 4 - Foundations of Macroeconomics Total Flash Cards: 36 Created: 01/22/2008 11:32:13		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 Money Definition Any commodity or token that is generally accepted as a means of payment Term Means of Payment Definition A method of settling a debt Term What are the 3 vital functions of mone? Definition Medium of exchange Unit of account Store of value Term Medium of Exchange Definition An object that is generally accepted in return for good sand services Term Barter Definition The direct exchange of goods and services for other goods and services which requires a double coincidence of wants Term Unit of Account Definition An agreed-upon measure for stating the prices of goods and services Term Store of Value Definition Any commodity or token that can be held and exchanged later for goods and services Term Fiat money Definition Objects that are money because the law decrees or orders then to be money Term What are the objects that we use as money today? Definition Currency Deposits at banks and other financial institutions Term Currency Definition Bank notes (dollar bills) and coins Term Electronic cheque or e-cheque Definition An electronic equivalent of a paper cheque Term Electronic cash or e-cash Definition An electronic equivalent of paper notes and coins Term M1 Definition Currency outside the banks plus chequable deposits owned by the individuals and businesses at chartered banks Term M2+ Definition M1 plus personal savings deposits and nonpersonal notice deposits at banks plus dposits at credit unions, caisses populaires and other depository institutions Term Monetary System Definition The Bank of Canada and the banks and other institutions accept deposits and provide the services that enable people and businesses tto make and receive payment Term Chartered Bank Definition A private firm that is chartered by the federal government to receive deposits and make loans Term Reserves Definition The currency in a bank's vaults plus its deposits at the Bank of Canada Term Overnight Rate Definition The interest rate on overnight loans between baks and other large financial institutions Term Credit Union Definition A cooperative organization owned by a social or economic group such as a firm's employees that accepts deposits from and makes loans to its members Term Caisse Populaire Definition A financial institution that operates in Quebec and that is similar to a credit union Term Money market mutual fund Definition A fund managed by financial institution that seels shares to people and uses these funds to buy assets Term Trust and mortgage loan company Definition A privately owned depository institution that operates under the Trust and Loan Companies Act, 1992 Term Liquid Asset Definition An asset that can be easily and with certainty, converted into money Term Bank of Canada Definition Central Bank of Canada Term Central Bank Definition A public authority that provided banking services to banks and regulates financial institutions and markets Term Monetary Policy Definition Adjusting the quantity of money in the economy Term Ultimate monetary policy objective Definition The final goal of monetary policy - an inflation rate inside the target range of 1-3% a year Term Daily monetary policy target Definition A target that the bank of Canada sets and achieves each dayin pursuit of its ultimate inflation target - a target overnight rate Term Large Value Transfer System Definition Canada's national electronic payments system for a very large transactions between the chartered banks, the bank of Canada and a few other big financial institutions Term Bank rate Definition The interest rate at which the Bank of Canda stands ready to lend reserves to chartered banks Term Banker's Deposit rate Definition The inerest rate that the Bank of Canada pays banks on their deposits at the Bank of Canada Term Open market operation Definition The purchase or sale of government of canada securities - Treasury bills, and bonds in the open market by the Bank of Canada Term Monetary base Definition The sum of chartered bank's deposits at the bank of Canada plus coins and the bank of Canada notes Term Define money and describe its functions Definition P.149 Term Describe the monetary system and explain the functions of banks and other monetary institutions Definition P.149 Term Describe the functions of Bank of Canada Definition P.149