Term
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Definition
| promises to pay definitive money on demand |
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Term
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Definition
| mechanism for conducting transactions |
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Term
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Definition
| a system in which definitve money is authorized by a central bank or gov't body as legal tender - accpeted to pay debts and tax payments |
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Term
electronic funds transfer systems
- how does it enhance the efficiency of payments system?
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Definition
debit cards and automated teller machines.
includes direct deposits of payroll checks and electronic transfers ---reduce transaction costs, missed payments, cost of notifying borrowers of payments
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Term
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Definition
| electronic money --digital cash people use to buy goods and services over the internet |
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Term
| what's considered a liquid asset |
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Definition
| any money that does not involve transactions cost that is converted to cash |
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Term
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Definition
M2 - currently considered best
definitions of money : M1, M2, broader money aggregates
M1 - includes all the liquid assets
M2= M1+ short term investment accounts that are slightly less liquid - time deposits, savings accounts, money market deposit accounts, money market mutual fund shares
M3- include M2+ less liquid assets such as large denomination time deposits, institutional money market funds, term repurchase agreements. |
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Term
| what are the five criteria that serves as a suitable medium of exchange |
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Definition
1. acceptable
2. standard
3. durable
4. valuable
5. divisiible
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Term
money performs these functions of efficient exchange
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Definition
1. common medium of exchagne
2. unit of account
3. store of value
4. standard of deferred payments |
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