Economics
group of appointed officials who direct and supervise the Federal Reserve System
board of governors
liquid investments
contract between two parties In which one party protects the other against certain types of loss in exchange for payments
insurance
what CD stands for
certificate of deposit
money only backed by a governments promise
fiat money
a person who borrows money or capital
debtor
the direct exchange of one good for another good without a standard form of money passing from hand to hand
barter
principle that refers to people hoarding stable forms of money while spending less stable forms
Gresham's law
an arrangement provided by an individual's employer for the intent of providing for the employee's retirement from work
pension plan
Throughout history many people have done this to their currencies by adding lead and copper to gold or silver coins
debase
legal protection provided to stockholders of a corporations
limited liability
the situation that occurs when market prices rise because too much money is in circulation
inflation
investment company that combines the resources of all its shareholders and invests the money in a wide variety of areas
mutual funds
the theory that variation in the money supply is the main source of economic fluctuations
monetarism
a savings account that guarantees a certain interest rate and has a specified maturity date
CD or certificate of deposit
in market economics most of the savings needed to fund R+D come from this sector
private sector
guarantees the amount of original investment plus a specific rate of interest by a certain date
bonds
manage the US money supply
Federal Reserve
a legal entity which is distinct from the people who own it
corporation
the US department that is responsible for coining and printing money
the treasury department
consists only of transaction accounts, travelers checks, and all coins and paper money held only outside banks
M1
Three principle purposes of money
1.medium of exchange
2.measure of value
3.store of value
three key elements that determine how much an investment grows
1.time
2. rate of return
3. amount invested
quality of money that allows it to retain stability in value
constancy
asset that can be easily converted into M1 because it is highly liquid
near-monies