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16 Cards in this Set
- Front
- Back
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Front (Term) What are the 3 functions of money? |
Back (Definition) Medium of exchange: use of money in exchange for 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 |
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Front (Term) What are the 6 characteristics of money? |
Durable, portable, divisible, stable in value, scarce, accepted |
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Front (Term) What are the 3 types of money? |
Back (Definition) Representative: money backed by or exchangeable for a valuable item such as gold or silver Commodity: mediums of exchange such as cattle and gems Fiat: ($ today) face value occurs through govt. fiat, or order (it is legal tender) |
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What is the fed? |
Central bank of banks |
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Why was the fed created? |
Regulate our money in circulation and through banks and ending financial panics |
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What do the board of governors do? |
Directs fed's operations and supervises the 12 federal reserve district banks and the members |
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What does the federal advisory council do? |
Assists the board of governors |
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What does the federal open market committee do? |
12 individuals who meet 8x per year to decide course of action for the fed |
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What are the federal reserve banks made of? |
9 people made of board of directors, bankers and business people and 25 branch banks |
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What are the 6 functions of the fed reserve? |
Clearing checks, acting as fed govt. fiscal agent, supervising member banks, holding reserves and setting reserve requirements, supplying paper currency, regulating the money supply |
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What is m1? |
First definition of money, bills and coins |
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What is m2? |
Second definition of money, like m1 but includes deposits |
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What is the monetary policy? |
Policy that involves changing the rate of growth of the supply of money in circulation in order to affect the cost and availability to credit |
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Loose money policy |
Monetary policy that makes credit inexpensive and abundant, possibly leading to inflation |
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Tight money supply |
Monetary policy that makes credit inexpensive and in short supply in an effort to slow the economy |
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What is Federal funds rate? |
Interest rate that banks charge each other on loans |
