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| Amount charged for borrowing |
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| Using money that's not there |
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| Your record (are you trusted or not?) |
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Term
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Definition
| require small deposits through band, insured, low risk |
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Definition
| "Time Deposit", through banks, insured, low risk |
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Term
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Definition
i. Time deposit
ii. Through banks, insured
iii. Low risk = Low rate of return
iv. Usually have a minimum to start
Buy another CD once you get the first one cashed with the first money |
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Term
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Definition
i. Shares of ownership
ii. Make $ through dividends or selling |
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Term
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| selling stock for more than you paid |
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| selling stock for less than you paid |
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| reinvests into more stock |
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Definition
a. Each single share splits into more than one share
b. Happens when stock prices are too high
c. Prices generally rise later |
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Term
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Definition
• A “loan” to a company or government
• Purchaser receives annual interest payment collects principal at maturity date
• Seen as less risky than stocks because bondholders are paid before stockholders |
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Term
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Definition
• Money is spread over a variety of investments
• Allows individuals with little money to own a variety
• Lessens risk, different types if others fail
• Not insured |
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Term
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Definition
| Spreading investments out |
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Term
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Definition
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Term
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| Something worth and used to pay |
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Definition
| means through which goods and services can be exchanged |
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Definition
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Definition
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Term
| Physical properties of Money |
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Definition
• Durability – Needs to be sturdy & long-lasting
• Portability – Needs to be small, light, and easy to carry.
• Divisibility – Needs to have endless ways to be divided.
• Uniformity – Needs to be uniform and recognizable, with unique characteristics. |
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Term
| Economic Properties of Money |
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Definition
• Stability of Value – Money purchasing power, or value, should be relatively stable
• Scarcity – Money must be scarce to have and value
• Acceptability – People must except that money is a valid medium of exchange |
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Term
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Definition
| • Has value based on what it is made of |
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Term
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Definition
| • Money that can be exchanged for something else of value |
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Term
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Definition
| • Has value only because the government has issued a Fiat, or order, saying this. |
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Term
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Definition
| , demand deposits, and other checkable deposits |
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| – funds that can be converted into currency “on demand” |
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Term
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Definition
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Term
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Definition
• Automated Teller
Machines
• Electronic devices that allow bank customers
to make deposits, withdrawals, and transfers and
check their account balances at any time without
seeing a bank officer |
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Term
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Definition
• Cards that can be used like an ATM
card to withdraw cash or like a check to make
purchases |
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Term
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Definition
• Being able to perform any transaction without going to the bank
• Used through the internet mainly for convenience
• Challenges:
o Information security
o Identity theft
o Bank has much info on customers |
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Term
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Definition
Federal Reserve System (Fed)
• Nation’s Central bank
• Divides the U.S. into twelve districts
• Factional reserve banking |
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Term
| Fractional Reserve Banking |
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Definition
• A system of banking that requires banks to hold a fraction of a deposit; the bank may loan out the rest.
• The fraction that must be held is called the Required Reserve Ratio (RRR) |
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Term
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Definition
| • The fraction that must be held |
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