Types of Money
Before money civilizations used this system.
The Barter System
A characteristic of money meaning that you can break it into smaller pieces.
Divisibility
Banks attract deposits by....
paying interest on accounts
When was the Federal Reserve established?
1913
CPI stands for ...
Consumer Price Index
This type of money involves using things like seashells, tobacco, or spices.
Commodity Money
A characteristic of money that means you can carry it around.
Portability
When the depositors all take out there money at the same time.
A Bank Run
What is the Dual Mandate of the Fed?
The general sustained upward movement of prices is called .....
Inflation
Money backed by gold or silver.
Representative money
A use of money for comparing value of goods and services.
A Unit of Account
How do banks make money?
Charging interest on loans
What does FOMC stand for?
Federal Open Market Committee
When inflation is high, what would The Fed do?
raise interest rates
Money backed by government decree
Fiat Money
A __________ of exchange is anything used to measure value during the exchange of goods and services.
Medium
How many regional banks are in the Federal Reserve System?
12
How long does it take before the Fed's monetary policy begins to affect the economy?
6 to 18 months
Something that is included in M2 but not M1 is ....
Long term CD's
Savings Deposits
Money Market Mutual Funds
Fiat money is said to have no ________ value.
Intrinsic
A use of money meaning it keeps its value it you don't spend it right away.
Store of Value
Declining consumer confidence would be a positive or negative shock to aggregate demand.
Negative
When the economy looks to be in a recession what would The Fed do?
lower interest rates
Name something that is included in both M1 and M2
Currency
Checkable Deposits