Create an account
Double coincidence of wants
The situation in which each of two parties to an exchange has what the other wants
Medium of exchange
anything that is generally accepted as a standard of value and a measure of wealth in a particular country or region
the difference between the face value of money and the cost of supplying it; the profit from issuing money
Fractional reserve banking
a banking system that keeps only a fraction of funds on hand and lends out the remainder
originally, pieces of paper promising a specific amount of gold or silver to anyone who presented them to issuing banks for redemption; today, Federal Reserve notes are mere paper money
money that the government declares to be legal tender although it cannot be converted into standard specie
financial institutions through which savers can indirectly provide funds to borrowers
commercial banks and thrift institutions; financial institutions that accept deposits from the public
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
Funds the bank use to satisfy the cash demands of their customers and the reserve requirements of the Fed; reserves consist of cash held by banks plus deposits at the Fed
Federal Open Market Committee
(FOMC) - the 12 member group that determines the purchase and sale policies of the Federal Reserve Banks in the market for U.S. government securities.
Money market mutual fund
a fund that pools money from small savers to purchase short -term government and corporate securities
Bank holding company
corporation that owns one or more banks and does not accept deposits or make loans
a loan granted to individuals with poor credit histories who do not qualify for a conventional mortgage
is either an ownership claim in a pool of mortgages or an obligation that is secured by such a pool.
Trouble Asset Relief Program
Government program that invested in financial institutions to help stabilize markets
Too big to fail
A company is this if it is perceived that the failure of a certain firm will cause a general economic crash/panic.
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