| A | B |
|---|
| money | anything used as a medium of exchange, a unit of accounting, & a store of value |
| medium of exchange | characteristic of money where the seller will accept it as payment for a good or service |
| barter | exchange of goods or services; done prior to money |
| double coincidence of wants | necessary for barter to work |
| unit of accounting | characteristic of money where it can be used to compare the value of goods in relation to one another |
| store of value | characteristic of money where we can use money over time |
| durable | money must be able to withstand wear & tear of being passed from one person to another |
| portable | easily able to be carried around |
| scarcity | makes money valuable |
| commondity money | has value as item; like cattle or gems |
| representative money | money backed by or exchangeable for gold or silver |
| fiat money | shows face value so that it is legal tender |
| Congress | has the power to coin money and set standards of weights and measures |
| Gold Standard Act of 1900 | officially made US currency backed by gold |
| Federal Reserve System | created in 1913 to control the nation's economy |
| expansion | point of the business cycle where the economy is growing |
| peak | the height of the business cycle |
| recession | a decrease in business activity that lasts 6 months |
| trough | lowest point in the business cycle |
| token coins | US coins that are worth less than face value. Issued by US mint |
| Bureau of Engraving & Printing | issues all Federal Reserve Notes (paper money) |
| loose money policy | credit is inexpensive to borrow and abundant |
| tight money policy | credit is expensive to borrow and scarce |
| reserve requirement | amount that banks are required to keep on hand. The rest is loaned out again |
| money expansion | how much a deposit in a bank "grows" as a result of being reissued by a bank |
| Board of Governors | direct operations of the Fed. 7 full time members |
| Jerome Powell | current chairman of the Fed |
| Alan Greenspan | previous chairman of the Fed |
| President & Congress | appoint and approve Board of Directors |
| Federal Advisory Council (FAC) | assists the Board of Directors and elected by each of Fed Reserve district banks |
| check clearing | job of the Fed that involves cashing checks |
| discount rate | interest rate charged by the Fed |
| selling securities (treasury bills) | most common tool used by the Fed to control the economy |
| mutual funds | buy most treasury bills from the Fed |
| Gross Domestic Product (GDP) | total value of all final goods and services produced in a nation in a single year |
| inflation | prolonged rise in general price levels of goods and services |
| Consumer Price Index (CPI) | measures the change in prices of specific goods over a set time |
| deflation | prolonged decline in prices |
| purchasing power | how much you can buy with money |
| regulate money supply | job of the Fed |
| FDIC | insures all personal savings accountsup to $250,000 per person per institution |
