Medium of Exchange
anything that is generally accepted as a standard of value and a measure of wealth in a particular country or region
Unit of Account
a means for comparing the values of goods and services
Store of Value
an item that people can use to transfer purchasing power from the present to the future
the most readily available type of money; consists of currency in circulation and demand deposits (checking accounts) that can be converted to currency immediately;is the largest and most liquid component of the money supply
All of M1 + less immediate (liquid) forms of money to include savings, money market mutual funds, and small denomination time deposits.
All of M1 + M2 + large denomination time deposits and large-denomination repurchase agreements.
coins of regular issue whose face value is greater than their intrinsic value
Federal Reserve Notes
paper currency issued by the fed that eventually replaced all other types of federal currency
money deposited in a bank that can be withdrawn at any time by presenting a check
The largest financial intermediary directly involved in the financing of real estate.
financial institutions that receive most of their funds from the savings of the public; they include savings banks, savings and loan associations, and credit unions
Close substitutes for transactions money, such as savings accounts and money market accounts.
a bank account that accumulates interest
Bank relatively attractive rate that varies with the current market rate of interest, limited checking privileges, insured, Disadvantage: high minimum balance, pays less that some other short-term investments such as CDs and money market mutual funds.
Money Market Mutual Fund
holding money as a medium of exchange to make payments (the level varies directly with nominal GDP)
holding money as a store of value instead of other assets such as certificates of deposit, corporate bonds, and stocks
total demand for money
the sum of the transactions demand for money and the asset demand for money.
a market for short-term debt instruments
Federal Reserve System
The country's central banking system, which is responsible for the nation's monetary policy by regulating the supply of money and interest rates.
Board of Governors
the seven-member group that supervises and controls the money and banking system of the United States; the board of Governors of the Federal Reserve system; the Federal Reserve board.
The Federal Open Market Committee is the most powerful committee of the FED, because it makes the decisions that affect the economy as a whole by manipulating the money supply.