Unit 4 Test Review Flashcards
(27 cards)
anything that serves as a medium of exchange, a unit of account, and a store of value
money
anything that is used to determine value during the exchange of goods and services
medium of exchange
the direct exchange of one set of goods or services for another
barter
a means for comparing the values of goods and service
unit of account
coins and paper bills used as money
currency
Three Uses of Money
medium of exchange
unit of account
store of value
Six Characteristics of Money
Durability Portability Divisibility Uniformity Limited Supply Acceptability
objects that have value in themselves and that are also used as money
commodity money
objects that have value because the holder can exchange them for something else of value
representative money
money that has value because the government has ordered that it is an acceptable means to pay debts
fiat money
Three Sources of Money’s Value
commodity money
representative money
fiat money
an institution for receiving, keeping, and lending money
bank
a bank chartered, or licensed by the national government
national bank
widespread panic in which great numbers of people try to redeem their paper money
bank run
Four problems that arose as a result of the Free Banking Era
bank runs
wildcat banks
fraud
many different currencies
paper currency issued during the Civil War
greenback
a monetary system in which paper money and coins are equal to the value of a certain amount of gold
gold standard
the nation’s central banking system
Federal Reserve System
bank that can lend to other banks in times of need
central bank
bank that belongs to the Federal Reserve System
member bank
the national currency we use today in the United States
Federal Reserve note
the severe economic decline that began in 1929 and lasted for more than a decade
Great Depression
the government agency that insures customer deposits if a bank fails
Federal Deposit Insurance Corporation
Causes of the Savings and Loan Crisis
Deregulation
High interest rates
Bad loans
Fraud
