Macro Economics Chapter 14 Key Words Flashcards
barter
The direct exchange of one good or service for another good or service, rather than for money.
Board of Governors of the Federal Reserve System
The seven members appointed by the president and confirmed by the U.S. Senate who serve for one nonrenewable 14–year term. Their responsibility is to supervise and control the money supply and the banking system of the United States.
checkable deposits
The total of checking account balances in financial institutions convertible to currency “on demand” when a check is written without advance notice.
commodity money
Anything that serves as money while having market value in other uses.
currency
Money, including coins and paper money.
Federal Deposit Insurance Corporation (FDIC)
A government agency established in 1933 to insure commercial bank deposits up to a specified limit.
Federal Open Market Committee (FOMC)
The Federal Reserve’s committee that directs the buying and selling of U.S. government securities, which are major instruments for controlling the money supply. The FOMC consists of the seven members of the Federal Reserve’s Board of Governors, the president of the New York Federal Reserve Bank, and the presidents of four other Federal Reserve district banks.
Federal Reserve System
The 12 central banks that service banks and other financial institutions within each of the Federal Reserve districts; popularly called the Fed.
fiat money
Money accepted by law and not because of its redeemability or intrinsic value.
M1
The narrowest definition of the money supply. It includes currency, traveler’s checks, and checkable deposits.
M2
The definition of the money supply that equals M1 plus near monies, such as savings deposits and small time deposits of less than $100,000.
medium of exchange
The primary function of money to be widely accepted in exchange for goods and services.
Monetary Control Act
A law, formally titled the Depository Institutions Deregulation and Monetary Control Act of 1980, that gave the Federal Reserve System greater control over nonmember banks and made all financial institutions more competitive.
money
Anything that serves as a medium of exchange, unit of account, and store of value.
store of value
The ability of money to hold value over time.
