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19 terms

Economics Chapter 14 Vocabulary

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money
anything customarily used as a medium of exchange, a unit of accounting, and a store of value
medium of exchange
use of money in exchange for goods and services
barter
exchange of goods and services for other goods and services
unit of accounting
use of money as a yardstick for comparing the values of goods and services in relation to one another
store of value
use of money to store purchasing power for later use
commodity money
a medium of exchange such as cattle or gems that has value as a commodity or good aside from its value as money
representative money
money that is backed by an item of value, such as gold or silver
fiat money
money that has value because a government fiat, or order, has established it as acceptable for payment of debts
legal tender
money that by law must be accepted for payment of public and private debts
overdraft checking
checking account that allows a customer to write a check for more money that exists in his or her account
electronic funds transfer (EFT)
system of putting onto computers all the banking functions that in the past we handled on paper
automated teller machines (ATMs)
units that allow consumers to do their banking without the help of a teller
checking account
account in which deposited money can be withdrawn at any time by writing a check
checkable deposits
money deposited in a bank that can be withdrawn at any time by presenting a check
thrift institutions
mutual savings banks, S&Ls, and credit unions that offer many of the same services as commercial banks
debit card
device used to make cashless purchases; money is electronically withdrawn from the consumer's checkable account and transferred directly to the store's bank account
near moneys
assets, such as savings accounts, that can be turned into money relatively easily and without the risk of loss of value
M1
narrowest definition of the money supply; consists of moneys that can be spent immediately and against which checks can be written
M2
broader definition of the money supply; includes all of M1, plus such near moneys as money market mutual fund balances, certificates of deposit, and Eurodollars