Term
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Definition
| Claim on some future income |
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Term
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Definition
| Loan that has a maturity date |
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Term
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Definition
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Term
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Definition
| When a company cannot pay debts |
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Term
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Definition
| Partial ownership of a company |
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Term
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Definition
| People who have excess of money |
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Term
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Definition
| People who expand productivity capacity |
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Term
Chapter 1
Diversification
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Definition
| Distributing amoung assets |
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Term
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Definition
| Shares of diversified set of securities |
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Term
Chapter 1
Asymmetric Information |
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Definition
| When one person knows more than the others |
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Term
Chapter 1
Adverse Selection |
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Definition
| The people that are most eager are less desirable to parties of the other side of transaction. More risky. |
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Term
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Definition
| One party acts in a way that risks other party |
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Term
Chapter 1
Financial Institution |
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Definition
| Channel between investors and savers |
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Term
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Definition
| Financial institute that accepts deposits and makes private loans |
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Term
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Definition
| Loan negotiated 1 buyer and 1 lender |
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Term
Chapter 1
Indirect Finance |
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Definition
| Savers save money in banks that then lead to investors |
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Term
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Definition
| Savers provide funds to investors by buying securities in financial markets |
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Term
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Definition
| Provisions in loan contract in restrict borrower's behavior |
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Term
Chapter 1
Economic growth |
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Definition
| Increase in productivity and living standards |
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Term
Chapter 1
Real gross domestic product (real GDP) |
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Definition
| Measure total output of goods and securities |
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Term
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Definition
| Small loans to help poor people start business |
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Term
Chapter 1
Centrally planned economy |
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Definition
| Government decides good and services |
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Term
Chapter 1
Financial Crisis |
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Definition
| Major distribution of the financial system |
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Term
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Definition
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Term
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Definition
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Term
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Definition
| Serves as medium of exchange |
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Term
Chapter 2
Medium of Exchange |
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Definition
| Whatever is used to get goods/services |
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Term
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Definition
| Amount of wealth people want in money |
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Term
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Definition
| System of exchange in which goods and services are traded directly. No money |
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Term
Chapter 2
Double Coicidence of Wants |
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Definition
| Condition needed for barter. Both parties must have somehing the other wants |
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Term
Chapter 2
Unit of Account |
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Definition
| Measure in which prices and salaries are quoted |
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Term
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Definition
| Form in which wealth can be held |
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Term
Chapter 2
Commodity Money |
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Definition
| Valuable good that serves as medium of exchange |
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Term
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Definition
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Term
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Definition
| Use of foreign currency (usually US) as money |
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Term
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Definition
| Institution that issues money backed by foreign currency |
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Term
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Definition
| Group of countries with common currency |
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Term
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Definition
| Total amount of money in economy |
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Term
Chapter 2
Monetary aggregate
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Definition
| Measure of money supply (M1 or M2) |
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Term
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Definition
Primary measure of money supply
Sum of currency held by nonbank public, checking deposits, and traveler's checks |
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Term
Chapter 2
Payments system |
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Definition
| How money reaches the sellers of goods and services |
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Term
Chapter 2
Stored-value card |
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Definition
| Card issued with a prepaid balance |
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Term
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Definition
| Funds in an electronic account used for internet purchases |
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Term
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Definition
| Ease of getting assets for money |
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Term
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Definition
| Broad measure of money supply. Includes M1 and other liquid assets (savings deposits, small deposits, retail funds) |
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Term
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Definition
| Shifts funds temporarily from customer's checking accountd to money-market deposit accounts |
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Term
Chapter 2
Monetary policy |
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Definition
| Central banks' management of money supply |
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Term
Chapter 2
Lender of last resort |
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Definition
| Central bank's role as emergency lender |
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