ECON Ch 13

any item sellers generally accept and buyers generally use to pay for a good or service; money; a convenient means of exchanging goods and services without engaging in barter

a standard unit in which prices can be stated and the value of goods and services can be compared; one of the three functions of money

an asset set aside for future use; one of the three functions of money

the most narrowly defined money supply, equal to currency in the hands of the public and the checkable deposits of commercial banks and thrift institutions

a more broadly defined money supply, equal to M1 plus noncheckable savings account (including money market deposit accounts), small time deposits (deposits of less than $100,000), and individual money market mutual fund balances

A very broadly defined money supply, equal to M2 plus large time deposits (deposits of $100,000 or more)

coins having a face value greater than their intrinsic value

Paper money issued by the Federal Reserve Banks

any deposit in a commercial bank or thrift institution against which a check may be written

a firm that engages in the business of banking (accepts deposits, offers checking accounts, and makes loans)

a savings and loan association, mutual savings bank, or credit union

financial assets, the most important of which are noncheckable savings accounts, time deposits, and U.S. short-term securities and savings bonds, which are not a medium of exchange but can be readily converted into money

a bank account that earns interest

interest-earning accounts at banks and thrift institutions, which pool the funds of depositors to buy various short-term securities

an interest-earning deposit in a commercial bank or thrift institution that the depositor can withdraw without penalty after the end of a specified period

interest-bearing accounts offered by investment companies, which pool depositors' funds for the purchase of short-term securities. Depositors may write checks in minimum amounts or more against their accounts

anything that government says must be accepted in payment of a debt

the amount of money people want to hold for use as a medium of exchange (to make payments); varies directly with the nominal GDP

the amount of money people want to hold as a store of value; this amount varies inversely with the interest rate

the sum of the transactions demand for money and the asset demand for money

the market in which the demand for and the supply of money determine the interest rate (or the level of interest rates) in the economy

the central bank of the U.S.; incorporates the 12 Federal Reserve branch banks which in turn control the lending activity of the nation's banks and thrift institutions

the central authority of the U.S. money and banking system

The 12-member group that determines the purchase and sale policies of the Federal Reserve Banks in the market for U.S. government securities

The 12 banks chartered by the U.S. government to control the money supply and perform other functions

firms like commercial banks, thrifts, insurance companies, mutual fund companies, pension funds, and securities firms that offer financial services (economic services provided by the finance industry)

using Internet to buy goods (using credit cards), buying and selling stock and mutual fund shares, transferring bank funds between accounts, and paying bills