Macroeconomics ch 29

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  1. Money
    The set of assets in an economy that people regularly use to buy goods and services from other people.
  2. Medium of Exchange
    An item that buyers give to sellers when they want to purchase goods and services.
  3. Unit of account
    The yardstick people use to post prices and record debts.
  4. Store of Value
    An item that people can use to transfer pruchasing power from the present to the future.
  5. Liquidity
    The ease with which an asset can be converted into the economy's medium of exchange.
  6. Commodity Money
    Money that takes the form of a commodity with intrinsic value.
  7. Fiet Money
    Money without intristic value that is used as money because of government decree.
  8. Currency
    The peper bills and coins in the hands of the public.
  9. Demand Deposits
    Balances in bank accounts that depositors can access on demand by writing a check.
  10. Federal Reserve (Fed)
    The central bank of United States
  11. Central Bank
    An institution designed to over see the banking system and regulate the quantity of money in the economy.
  12. Money Supply
    The quantity of money available in the economy
  13. Monetary Policy
    The setting of the money supply by policy makers in the cantral bank.
  14. Reserves
    Deposites that banks have received but have not loaned out.
  15. Fractional-Reserve Banking
    A banking system in which banks hold only a fraction of deposits as reserves.
  16. Reserve Ratio
    The fraction of deposits that banks hold as reserves.
  17. Money Multiplier
    The amount of money the banking system generates with each dollar of reserves.
  18. Open-Market Operations
    The purchase and sale of U.S. government bonds by the Fed.
  19. Reserve Requirements
    Regulations on the minimum amount of reserves tht banks must hold against deposits.
  20. Discount Rate
    The interest rate on the loans that the Fed makes to banks.
  21. Federal funds rate
    The interest rate at which banks make overnight loans to one another.
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Macroeconomics ch 29
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