ch 9

  1. anything that is generally accepted as a means of payment
    money
  2. three principal purposes of money
    • medium of exchange
    • provide a measure of value
    • provide a store of value
  3. the direct exchange of one good for another good without a standard form of money passing from hand to hand
    barter
  4. six characteristics of money
    • portability
    • durability
    • homogeneity
    • divisibility
    • constancy
    • intrinsic valuableness
  5. coined, metallic money
    specie
  6. coins with a quality and value that has been lowered
    debased
  7. 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
    Gresham's Law
  8. the asserted value
    face value
  9. when the level of prices in the market rises because too much money is in circulation
    inflation
  10. if prices decrease because money seems more valuable and stable
    deflation
  11. any form of money that has been declared a valid means of payment
    legal tender
  12. gold, silver, or  platinum, usually found in the form of bars, ingots, or plates)
    bullion
  13. a system which allows banks to hold less than 100 percent of deposits in reserve
    fractional reserve banking
  14. legal tender that is backed by nothing but a government's promise
    fiat money
  15. the source of part of the American money supply
    United States Department of the Treasury
  16. the majority of America's money supply is under the control of this central banking network
    Federal Reserve System
  17. group of people whos duty is to operate America's banking system
    Board of Governors
  18. makes decisions regarding the buying and selling of government securities
    Federal Open Market Committee (FOMC)
  19. One for each of the nation's twelve Federal Reserve districts
    Federal Reserve Banks
  20. Three main tools that the Federal Reserve uses to increase or decrease the amount of money in circulation
    • open market operations
    • reserve ratios
    • discount rates
  21. a period, usually six months or longer, during which the economy recedes, or declines
    recession
  22. the theory that the variation in the money supply is the main source of economic fluctuations
    monetarism
  23. make loans directly to consumers
    finance companies
  24. receive a premium paid by the insured to protect the family of the insured in the event of loss or death
    insurance companies
  25. receive funds from a company's employees, and the employer may contribute to the fund on behalf of his employees
    Pension funds
  26. 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
    Insider trading
  27. 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
    collateral
  28. loan that is backed with collateral
    secured loans
  29. involve greater risk for the lender since they are not backed with collateral
    unsecured loans
  30. 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
    wage garnishment
  31. large initial cash payment
    down payment
  32. partial ownership in the item
    equity
Author
Rayna
ID
345851
Card Set
ch 9
Description
A Beka 11-12th grade economics
Updated