Vocab Words
"Generally accepted" in exchange for goods and services.
What is Money?
The narrowest definition of the money supply
What is M1?
Why does it have to be Physically Durable?
To make sure it is a reliable store of value, and a medium of exchange.
The result of the money supply increases too quickly.
What is too much money chasing too few goods, pushing up prices?
How we gauge the value of goods in dollars.
What is Unit of Account.
Use of another country’s currency in private transactions.
What is Currency Substitution?
Included in M1
What is Currency + Checkable Deposits?
Characteristic of a commodity that means it can be easily moved from person to person.
What is Portable?
Occurs when money supply is growing too quickly.
What is inflation?
If an economy if suffering inflation, currency is losing its ___ of ___.
What is Store Of Value
Assets accepted for repayment of debt to the government as well as private transactions.
What is Legal Tender?
Included in M2
What is M1 + Saving deposits, including money market deposit accounts + Small-denominations?
Characteristic of a commodity that means it can be broken down to do the transaction.
What is Divisible?
This happens if the money supply does not grow fast enough.
What is there is not enough money for transactions to take place.
Enables people to transfer purchasing power from the present to the future.
What's Store of Value?
The situation when market participants use another country’s currency as money.
What is Dollarization?
Currency (coins and paper money) in the hands of the public.
All checking deposits: All deposits in commercial banks and “thrift”or savings institutions on which deck of any size can be drawn.
What are the 2 Components for M1?
Characteristic of a commodity that allows prices of two units to be easily compared.
What is easily standardized?
The Amount of Money matters because. . .
What is:
To measure inflation, to have enough money for transactions
Measuring the relative worth of a wide variety of goods, services and resources.
What's Unit of Account?
Another country’s currency is the legal tender, but the country also issues its own currency.
What is Official Semi-Dollarization?
The most liquid form of money, including physical currency in circulation and demand deposits (checkable deposits).
What is M1?
True or False
Commodity Money has some other use other than being a medium of exchange, and being a unit of account, and having store of value.
True
If there is too little money, this could happen.
What is a recession or a depression?
Usable for buying and selling goods and services.
What's Medium of Exchange?