Economics Honors Chapter 10
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Created by:
kcannatella on January 8, 2012
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32 terms
Terms | Definitions |
|---|---|
 money | anything that serves as a medium of exchange, a unit of account, and a store of value |
| medium of exchange | anything that is used to determine value during the exchange of goods and services |
| barter | the direct exchange of one set of goods or services for another |
| unit of account | a means for comparing the values of goods and services |
| store of value | something that keeps its value if it is stored rather than used |
| currency | coins and paper bills used as money |
| commodity money | objects that have value in themselves and that are also used as money |
| representative money | objects that have value because the holder can exchange them for something else of value |
| fiat money | money that has value because the government has ordered that it is an acceptable means to pay debts |
| bank | an institution for receiving, keeping, and lending money |
| national bank | a bank chartered, or licensed, by the national government |
| bank run | widespread panic in which great numbers of people try to redeem their paper money |
| greenback | paper currency issued during the Civil War |
| gold standard | a monetary system in which paper money and coins are equal to the value of a certain amount of gold |
| Federal Reserve System | the nation's central banking system |
| central bank | bank that can lend to other banks in times of need |
| member bank | bank that belongs to the Federal Reserve System |
| Federal Reserve note | the national currency we use today in the US |
| Great Depression | the severe economic decline that began in 1929 and lasted for more than a decade |
| Federal Deposit Insurance Corporation (FDIC) | the government agency that insures customer deposits if a bank fails |
| money supply | all the money available in the US economy |
| liquidity | the ability to be used as, or directly converted to, cash |
| demand deposit | the money in checking accounts |
| money market mutual fund | a fund that pools money from small savers to purchase short-term government and corporate securities |
| fractional reserve banking | a banking system that keeps only a fraction of funds on hand and lends out the remainder |
| default | failure to pay back a loan |
| mortgage | a specific type of loan that is used to buy real estate |
| credit card | a card entitling its holder to buy gods and services based on the holder's promise to pay for these goods and services |
| interest | the price paid for the use of borrowed money |
| principal | the amount of money borrowed |
| debit card | a card used to withdraw money |
| creditor | person or institution to whom money is owed |
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