Pearson Prentice Hall ch 10

money

anything that serves as a medium of exchange, a unit of account, and a store of value

medium of exchange

anything that is used to determine value during the exchage of goods and services; buying food with a money

barter

the direct exchage of one set of goods or sevices for another

unit of account

a means for comparing the values of goods and services; comparison of $35 jacket at one store and $30 jacket at another store

store of value

something that keeps its value if it is stored rather than used; piggy bank

currency

coins and paper bills used as money

commodity money

objects that have value in themselves and that are also used as money; chicken

representative money

objects that have value becuase the holder can exchage them for something else of value; silver certificate

fiat money

money that has value because the government has ordered that it is an acceptable means to pay debts; "legal tender

bank

an institution for receiving, keeping, and lending money

national bank

a bank chartered, or licensed, by the national government

bank run

widespread panic in which great numbers of people try to redeem their paper money

gold standard

a monetary system in which paper money and coins are equal to the value of a certain amout of gold

Federal Reserve System

the nation's central banking system

central bank

bank that can lend to other banks in times of need

member bank

bank that belongs to the Federal Reserve System

Federal Reserve note

the national currency we use today in the United States

Great Depression

the severe economic decline that began in 1929 and lasted for more than a decade

FDIC

the government agency that insures customers' deposits if a bank fails; Federal Deposit Insurance Corporation

money supply

all the money available in the United States economy

liquidity

the ability to be used as, or directly converted to, cash

demand deposit

the money in checking accounts

money market mutual fund

a fund that pools money from small savers to purchase short-term government and corporate securities

fractional reserve banking

a banking system that keeps only a fraction of funds on hand and lends out the remainder

default

failure to pay back a loan

mortgage

a specific type of loan that is used to buy real estate

credit card

a card entitling its holder to buy goods and services based on the holders's promise to pay for these goods and sevices

interest

the price paid for the use of borrowed money

principal

the amount of money borrowed

debit card

a card used to withdraw money

creditor

person or institution to whom money is owed