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24 Cards in this Set
- Front
- Back
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money
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Anything that can be exchanged for goods and services
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medium of exchange
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function of money that means you can buy stuff with it
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barter
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exchanging goods without the use of money
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unit of account
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function of money that means you can compare prices
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store of value
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function of money that means it will hold its value over time
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commodity money
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money that has value based on what its made of
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representative money
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money that is backed by something tangible, like silver or gold
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fiat money
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money that is declared by the government to have worth
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Federal Reserve System, or The Fed
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the central bank of the United States
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Board of Governors
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7 members who supervise operations of the Fed and set policy
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Federal Open Market Committee
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The Board of Governors, the president of the NY Fed, and a rotating set of 4 other Fed presidents who serve one year terms
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monetary policy
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The Fed's actions that change the money supply in order to influence the economy
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open market operations
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the buying and selling of government bonds by the Fed
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federal funds rate
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interest rate that banks charge each other for overnight loans
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reserve requirement
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the percentage of demand deposits a bank must hold in cash reserves, set by the Fed
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discount rate
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interest rate the Fed charges banks to borrow money
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expansionary monetary policy
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a plan to increase the money supply that might include buying bonds, lowering the discount rate, or lowering the reserve requirement
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contractionary monetary policy
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a plan to decrease the money supply that might include selling bonds, increasing the discount rate, or increasing the reserve requirement
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durability |
characteristic of money that means it is not easy to destroy |
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portability |
characteristic of money that means it is easy to carry around |
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uniform |
characteristic of money that means each unit looks the same and is easily identifiable
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divisible |
characteristic of money that means it is easy to make change |
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scarce |
characteristic of money that means it is not abundant, which gives money its value |
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accepted as payment |
characteristic of money that means you know others will take it when you make a purchase |
