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23 Cards in this Set
- Front
- Back
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anything that is generally accepted as payment for goods and services or in the repayment of debt |
money |
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the total collection of pieces of property that serve to store value |
wealth |
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a flow of earnings per unit time |
income |
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a certain amount at a given point in time |
stock |
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What are the three primary functions of money? |
as a medium of exchange as a unit of account as a store of value |
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What does medium of exchange mean? |
it is used to pay for goods and services |
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the time spent trying to exchange goods or services |
transaction cost |
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For a commodity to function effectively as money, it has to meet 5 criteria |
It must be easily standardized It must be widely accepted it must be divisible it must be easy to carry it must not deteriorate quickly |
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What does unit of account mean? |
money is used to measure value in an economy |
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What does store of value mean? |
a repository of purchasing power available over time |
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in which the inflation rate exceeds 50% per month |
hyperinflation |
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the method of conducting transactions in the economy |
payments system |
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money made up of precious metals or another valuable commodity is called... |
commodity money |
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pieces of paper that function as a medium of exchange |
paper currency |
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paper currency degreed by government as legal tender |
fiat money |
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an instruction from you to your bank to transfer money from your account to someone else's account when she deposits it |
check |
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money that exists only in electronic form |
electronic money |
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enable consumers to purchase goods and services by electronically transferring funds directly from their bank accounts to a merchant's account |
debit cards |
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A stored value card is... |
purchased for a preset dollar amount that the consumer pays up front |
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What does M1 include? |
currency, checking account deposits and traveler's checks |
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What does M2 include? |
Everything in M1 plus assets that have check-writing features and other assets that can be turned into cash quickly and at very little cost |
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assets that have check-writing features |
money market deposit accounts and money market mutual fund shares |
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Other assets (2) |
savings deposits small denomination time deposits |
