Term
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Definition
| Medium of exchange, store of value and unit of account. |
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Term
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Definition
| using money to purchase a good or service |
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Term
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Definition
| Holding an asset for future use |
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Term
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Definition
| The way relative values are measured. |
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Term
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Definition
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Term
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Definition
| When a good has a use other than just money. |
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Term
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Definition
| A legal authority has deemed it money. |
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Term
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Definition
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Term
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Definition
| Checkable deposits = currency/coin in circulation = travelers checks |
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Term
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Definition
| M1 + saving deposits + small denomination time deposits + money market mutual fund accounts |
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Term
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Definition
| Money is NOT created by printing. |
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Term
| Fractional Reserve System |
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Definition
| Banking system in which banks are required to hold only a fraction of their deposits on reserve. |
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Term
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Definition
1. Total Reserves (TR) - Reserves Required (RR) + excess reserves (ER)
2. Required Reserves (RR) - Demand Deposits (DD) * Required Residential Ratio (r)
3. Excess Reserves - Total Reserves (TR) - Required Reserves (RR) |
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Term
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Definition
| Assets must balance out with liabilities. Assets = "owned." Liabilities = "owed." |
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Term
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Definition
| reserves, vault cash, loans, government securities. |
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Term
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Definition
| checkable deposits, savings, time |
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Term
| Simple Deposit Multiplier |
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Definition
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Term
| Potential Deposit Creation (PDC) |
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Definition
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Term
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Definition
| TCD = Total Reserves (TR) * m |
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Term
| Constrains to Deposit Creation |
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Definition
1. currency coin/leakage
2. idle excess reserves
3. reserve ratio itself |
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