Shared Flashcard Set

Details

Chapter 16
econ
28
Economics
Undergraduate 2
04/26/2013

Additional Economics Flashcards

 


 

Cards

Term
medium of exchange
Definition
an item that sellers generally accept and buyers generally use to pay for goods and services
Term
unit of account
Definition
a standard measurement unit in terms of which prices can be stated and the relative value of goods and services compared
Term
store of value
Definition
an asset set aside to purchase items in the future
Term
liquidity
Definition
the ease with which an asset can be converted into cash
Term
M1
Definition
the most narrowly defined money supply, equal to currency (outside banks) plus the check-able deposits of commercial bank and thrift institutions
Term
federal reserve notes
Definition
paper bills issued by the federal reserve banks
Term
token money
Definition
currency that has a face value greater than the materials used to produce it
Term
check-able deposits
Definition
deposits in banks or thrifts against which checks may be written
Term
commercial banks
Definition
firms that engage in the business of banking (accepting deposits, offering checking accounts, and making loans)
Term
thrift institutions
Definition
savings and loan associations, mutual savings banks, or credit unions that offer savings and checking accounts
Term
near-monies
Definition
financial assets that do not directly serve as a medium of exchange but readily can be converted into narrowly defined money (currency + check-able deposits)
Term
M2
Definition
a more broadly defined money supply, equal to M1 plus non-check-able savings accounts (including money market deposit accounts), time deposits of less than $100,000, and individual money market mutual fund balances
Term
savings account
Definition
an interest-earning account (at a bank of thrift) from which funds normally can be withdrawn at any time
Term
money market deposit account (MMDA)
Definition
an interest-earning account (at a bank of thrift) consisting of short-term securities and on which a limited number of checks can be written each year
Term
time deposits
Definition
an interest-earning deposits (at a bank of thrift) such as certificates of deposit (CDs) that depositors can withdraw without penalty after the end of a specified period
Term
money market mutual fund (MMMF)
Definition
an interest-earning account at an investment company, which pools the funds of depositors to purchase short-term securities
Term
legal tender
Definition
a legal designation of a nation's official currency (bills and coins)
Term
federal reserve system
Definition
a central component of the U.S. banking system, consisting of the board of governors of the federal reserve and 12 regional federal reserve banks
Term
board of governors
Definition
the seven-member group that supervises and controls the money and banking system of the united states; the board of governors of the federal reserve system; the federal reserve board
Term
federal reserve banks
Definition
the 12 banks chartered by the U.S. government to control the money supply and perform other functions (central banks, quasi-public bank, and bankers' bank)
Term
federal open market committee (FOMC)
Definition
the 12-member federal reserve group that determines the purchase and sale policies of the federal reserve banks in the market for U.S. government securities
Term
fractional reserve banking system
Definition
a banking system in which banks and thrifts are required to hold less than 100 percent of their check-able-deposit liabilities as cash reserves
Term
balance sheet
Definition
a statement of the assets, liabilities, and net worth of a firm, individual, or institution at some time
Term
required reserves
Definition
the funds that banks and thrifts must deposit with the federal reserve bank (or hold as vault cash) to meet the fed's reserve requirement
Term
reserve ratio
Definition
the legally required percentage of reserves for every $1 of a bank or thrift's check-able deposits
Term
excess reserves
Definition
actual bank of thrift reserves minus legally required reserves
Term
actual reserves
Definition
the funds that a bank of thrift has a deposit at a federal reserve bank or is holding as vault cash
Term
monetary multiplier
Definition
the multiple of its excess reserves by which the banking system can expand check-able deposits and thus the money supply by making new loans
Supporting users have an ad free experience!