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Money
something commonly accepted as payment for goods and service
Currency
item used as money but does not act as a store of value and has no intrinsic value
Commodity money
raw material with intrinsic value used as exchange for other goods
Wealth
value of total assets owned by individual or entity
Money supply
amount of money available on the market
Liquidity
refers to how easily money can be accessed
Fractional reserve banking system
only a portion of total deposits are held while the rest are lent out
Money creation
generation of assets caused by initial deposit to bank which is held partially in reserve, partially constantly redistributed as a loan
Money multiplier
total amount of deposits resulting from initial deposit that is held as reserve
Discount rate
interest rate banks pay to borrow money from the Fed
Open market operations
involve Feds purchase and sale of government securities
Financial assets
entities over which institutional units or individuals assert ownership rights
Monetary policy
use of money and credit controls to influence interest rates, inflation, exchange rate, unemployment, real GDP
Note 
Flashcard (60)