AP Economics Unit 4: Money and Financial Sector

studied byStudied by 1 person
0.0(0)
Get a hint
Hint

medium of exchange

1 / 27

flashcard set

Earn XP

28 Terms

1

medium of exchange

an item that buyers give to sellers when they want to purchase goods and services

New cards
2

store of value

a means of holding purchasing power over time

New cards
3

unit of account

a means for comparing the values of goods and services

New cards
4

All liquid money (cash, coins, currency, checking acct.)

M1

New cards
5

M2

All of M1 + less immediate (liquid) forms of money to include savings, money market mutual funds, and small denomination time deposits.

New cards
6

demand deposit

the money in checking accounts

New cards
7

Liquidity

the ease with which an asset can be converted into cash

New cards
8

Money Demand

A relationship between the interest rate and the quantity of money that people are willing to hold at any given interest rate.

New cards
9

stock

A share of ownership in a corporation.

New cards
10

bond

a formal contract to repay borrowed money with interest at fixed intervals

New cards
11

time deposit

an account with guaranteed interest for a period of time

New cards
12

bank balance sheet

T account showing assets and liabilities

New cards
13

assets

money and other valuables belonging to an individual or business

New cards
14

Liabilities

debts that you owe

New cards
15

fractional reserve banking

a banking system that keeps only a fraction of funds on hand and lends out the remainder

New cards
16

required reserves

reserves that a bank is legally required to hold, based on its checking account deposits

New cards
17

excess reserves

a bank's reserves over and above its required reserves

New cards
18

federal funds rate

the interest rate at which banks make overnight loans to one another

New cards
19

prime interest rate

the lowest rate charged by a bank for a short-term loan

New cards
20

discount rate

The interest rate on the loans that the Fed makes to banks

New cards
21

open market operations

the purchase and sale of U.S. government bonds by the Fed

New cards
22

1/reserve ratio

money multiplier

New cards
23

nominal interest rate

the interest rate actually paid for a loan

New cards
24

real interest rate

the interest rate corrected for the effects of inflation

New cards
25

FDIC

a federally sponsored corporation that insures accounts in national banks and other qualified institutions

New cards
26

velocity of money

the rate at which money changes hands

New cards
27

Present Value of Money

the amount of money you would need to deposit today in order to accumulate a specific amount in the future

New cards
28

Future value of money

How much your money will be worth in the future if you invest it.

New cards

Explore top notes

note Note
studied byStudied by 22 people
Updated ... ago
4.0 Stars(1)
note Note
studied byStudied by 9 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 72 people
Updated ... ago
5.0 Stars(3)
note Note
studied byStudied by 62 people
Updated ... ago
4.0 Stars(1)
note Note
studied byStudied by 3 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 508 people
Updated ... ago
5.0 Stars(6)
note Note
studied byStudied by 69 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 14064 people
Updated ... ago
4.0 Stars(2)

Explore top flashcards

flashcards Flashcard65 terms
studied byStudied by 15 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard57 terms
studied byStudied by 9 people
Updated ... ago
5.0 Stars(2)
flashcards Flashcard168 terms
studied byStudied by 55 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard96 terms
studied byStudied by 4 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard20 terms
studied byStudied by 123 people
Updated ... ago
5.0 Stars(3)
flashcards Flashcard30 terms
studied byStudied by 15 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard100 terms
studied byStudied by 21 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard30 terms
studied byStudied by 4 people
Updated ... ago
5.0 Stars(1)