ch 9

anything that is generally accepted as a means of payment

three principal purposes of money

the direct exchange of one good for another good without a standard form of money passing from hand to hand

six characteristics of money

coined, metallic money

coins with a quality and value that has been lowered

when people save more stable and valuable forms of money, such as coins that are many years old, and will spend forms of money that seem less valuable

the asserted value

when the level of prices in the market rises because too much money is in circulation

if prices decrease because money seems more valuable and stable

any form of money that has been declared a valid means of payment

gold, silver, or  platinum, usually found in the form of bars, ingots, or plates)

a system which allows banks to hold less than 100 percent of deposits in reserve

legal tender that is backed by nothing but a government's promise

the source of part of the American money supply

the majority of America's money supply is under the control of this central banking network

group of people whos duty is to operate America's banking system

makes decisions regarding the buying and selling of government securities

One for each of the nation's twelve Federal Reserve districts

Three main tools that the Federal Reserve uses to increase or decrease the amount of money in circulation

a period, usually six months or longer, during which the economy recedes, or declines

the theory that the variation in the money supply is the main source of economic fluctuations

make loans directly to consumers

receive a premium paid by the insured to protect the family of the insured in the event of loss or death

receive funds from a company's employees, and the employer may contribute to the fund on behalf of his employees

occurs when someone buys or sells stocks on the stock market based on information that he has about a certain company that has not yet been made public

property belonging to the borrower that the lender will hold until the loan is repaid, as a way of ensuring that the borrower has an incentive to repay the loan

loan that is backed with collateral

involve greater risk for the lender since they are not backed with collateral

a court order demanding that a borrower's employer take a specified amount of an employee's wages each payday and pays the creditor directly

large initial cash payment

partial ownership in the item