Chapter 11: Money and Banking

Flashcards covering key concepts in Chapter 11: Money and Banking.

Medium of Exchange

An object that is widely accepted in exchange for goods and services.

Barter Trade

A system of exchange where goods and services are traded directly for other goods and services without using money.

Store of Value

An asset that can be saved and retrieved in the future value, maintaining its worth over time.

Unit of Account

A standard numerical monetary unit of measure that provides a consistent measure of value.

Fiat Money

Money that has value because a government maintains it and people have faith in its value.

Bank of Canada

The central bank of Canada that issues Canadian currency and regulates the money supply.

Commercial Banks

Financial institutions that accept deposits, offer loans, and provide various financial services.

Reserve Ratio

The fraction of deposits that a bank holds as reserves, either as cash or deposits with the central bank.

Money Creation

The process by which banks create money through loans and deposits.

Money Supply

The total amount of monetary assets available in an economy at a specific time.