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20 Cards in this Set

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The set of assets in an economy that people regularly use to buy goods and services from other people
Money
An item that buyers give to sellers when they want to purchase goods and services
Medium of exchange
The yardstick people use to post prices and record debts
Unit of account
An item that people can use to transfer purchasing power from the present to the future
Store of value
The ease with which an asset can be converted into the economy's medium of exchange
Liquidity
Money that takes the form of a commodity with intrinsic value
Commodity money
Money without intrinsic value that is used as money because of government decree
Flat money
Thepaper bills and coins in the hands of the public
currency
Balances in bank accounts that depositors can access on demand by writing a check
demand deposits
the central bank of the United States
Federal Reserve
An institution designed to oversee the banking system and regulate the quantity of money in the economy
Central Bank
The quantity of money available in the economy
Money supply
The setting of the money supply by policymakers in the central bank
Monetary policy
Deposits that banks have received but have not loaned out
Reserves
A banking system in which banks hold only a fraction of deposits as reserves
Fractional-Reserve Banking
The fraction of deposits that banks hold as reserves
Reserve ratio
The amount of money the banking system generates with each dollar of reserves
Money multiplier
The purchase and sale of U.S. government bonds by the Fed.
Open-Market Operations
Tegulations on the minimum amount of reserves that banks must hold against deposits
Reserve Requirements
The interest rate on the loans that the Fed. makes to the banks
Discount Rate