Ch. 10 vocab Flashcards
(22 cards)
an institution for receiving, keeping, and lending money
bank
direct exchange of one set of goods or services for another
barter
objects that have value in themselves and that are also used as money
commodity money
person or institution to whom money is owed
creditor
coins and paper bills used as money
currency
failure to pay back a loan
default
severe economic decline that began in 1929 and lasted for more than a decade
depression
government agency that insures customer deposits if a bank fails
FDIC; federal deposit insurance corporation
national currency in US / nation’s central banking system
federal reserve (FED)
money that has value because the government has ordered that it is an acceptable means to pay debts
fiat money
a banking system that keeps only a fraction of funds on hand and lends out the remainder
fractional reserve banking
a monetary system in which paper money and coins are equal to the value of a certain amount of gold
gold standard
price paid for the use of borrowed money
interest
ability to be used as, or directly converted to, cash
liquidity
anything that is used to determine value during the exchange of goods and services
medium of exchange
anything that serves as a medium of exchange, a unit of account, and store of value
money
specific type of loan that is used to buy real estate
mortgage
fund that pools money from small savers to purchase short-term government and corporate securities
mutual fund
amount of money borrowed
principal
objects that have value because the holder can exchange them for something else of value
representative money
something that keeps its value if it is stored rather than used
store of value
a means for comparing the values of goods and services
unit of account
