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11 Cards in this Set
- Front
- Back
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Functions of $
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Medium of exchange
unit of account store of value money is liquid (doesnt have to be currency) |
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Medium of Exchange
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used to buy-sell goods
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Unit of Account
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goods values in dollars
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Store of Value
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Hold Some weath in $ form
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M1 Money
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-Currency
-Checkable Deposits **Use NOW** |
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M2
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-M1 plus near-monies
-Savings depositsincluding money market dep. accts (MMDA) -small denominated time deposits -money market mutual funds (MMMF) -invest. for future spending |
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Why is money invaluable?
(Hyperinflation) |
makes it valuable
-acceptability -legal tender -relative scarcity |
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Federal Reserve Functions
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-issue currency
-set reserve requirements -lend $ to banks -collect checks -act as fiscal agent for US gov -supervise banks -control $ supply |
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Monetary Policy
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-intelligent management of $ supply
-actions of a central bank, currency board, or other regulatory committee that determine the size and rate of growth of the $ supply interest rates Increase economy slows Decrease |
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Token Money
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loose change
the penny you have costs more than 1 penny to make it |
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Near Monies
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non cash asset
highly liquid examples: bank deposits, certif. of deposit, treasury bills |
