Term
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Definition
| anything of value owned by a person or a firm |
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Term
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Definition
| assets that people are generally willing to accept in exchange for goods and services or for payment of debts |
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Term
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Definition
| a good used as money that also has value independent of its use as money |
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Term
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Definition
| money, such as paper currency, that is authorized by a central bank of governmental body and that does not have to be exchanged by the central bank for gold or some other commodity money |
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Term
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Definition
| the narrowest definition of the money supply: the sum of currency in circulation, checking account deposits in banks, and holdings of traveler's checks |
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Term
| Fractional Reserve Banking System |
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Definition
| a banking system in which banks keep less than 100 percent of deposits as reserves |
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Term
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Definition
| deposits that a bank keeps as cash in its vault or on deposit with the Federal Reserve |
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Term
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Definition
| reserves that a bank is legally required to hold, based on its checking account deposits |
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Term
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Definition
| the minimum fraction of deposits banks are required by law to keep as reserves |
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Term
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Definition
| reserves that banks hold over and above the legal requirement |
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Term
| Simple Deposit Multiplier |
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Definition
| the ratio of the amount of deposits created by banks to the amount of new reserves |
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