The Role of Money
Anything that serves as a medium of exchange, unit of account, and a store of value.
What is "Money"? (Pg. 228)
The seizures of property from owners who are unable to pay
What is a "foreclosure"?
Deposits that a bank keeps readily available as opposed to lending them out.
What are "reserves"?
All the money available in the United States economy.
What is "Money Supply"?
The strategy of spreading out investments to reduce risk.
What is a "diversification"?
The direct exchange of one set of goods or services for another.
What is "Barter"? (Pg. 228)
What is it call when greats amount people try redeem their money physically.
What is a "bank run"
The process by which banks record whose account gives up money and whose account receives money as a result of a customer writing a check.
What is "Check Clearing"?
A specific type of loan that is used to buy real estate.
What is "Mortgage"?
The money an investor receives above and beyond the sum of money that has been invested.
What is a "Return"?
Consists of objects that have value in and of themselves and that are used as money.
What is Commodity "Money"? (Pg. 232)
Paper money and coins that are equal to certain amounts of gold
What is the "gold standard"
A company that owns more than one bank.
What is a "Bank Holding Company"?
Cards entitling their owners to buy goods and services based on the owners' promises to pay.
What are "Credit Cards"?
The network of structures and mechanisms that allows the transfer of money between savers and borrowers.
What is a "financial system"?
Has value because a government has decreed that it is an acceptable means to pay debts.
What is "Fiat Money"? (Pg. 233)
What is another name for "demand notes"?
What are "greenbacks"?
The interest rate that banks charge each other for loans.
What is the "Federal Funds Rate"?
The amount borrowed.
What is "Principal"?
Its required by law, all intermediate provide this and other information to potential investors in an investment report.
What is a "prospectus"?
Makes use of objects that have value solely because the holder can exchange something else of value.
What is "Representative Money"? (Pg. 232)
A licensed or charted bank in cahoots with the Federal Government
What is a "National Bank"
The actions that the Fed takes to influence the level of real GDP and the rate of inflation in the economy.
What is "Monetary Policy"?
Funds that pool money from a large number of small savers to purchase short-term government and corporate securities.
What are "Money Market Mutual Funds"?
Two financial intermediates that help channel funds from savers to borrowers.
What is a "Mutual fund" and "a Hedge fun"?