Money
is any item or verifiable record accepted as payment for goods and services and repayment of debts.
Medium of Exchange
intermediary instrument or system used to facilitate the purchase and sale of goods and services between parties.
Store of Value
Retains its value, or purchasing power, and does not depreciate.
Standard of Deferred Payment
Money is used to settle debts.
Barter System
Exchange of goods and services without money.
Commodity Money
Money with intrinsic value (e.g., gold, silver).
Fiat Money
Money without intrinsic value but accepted by the government.
Digital Money
Electronic form of money (e.g., cryptocurrencies).
Financial Markets
Platforms where buyers and sellers trade financial assets.
Money Markets
Short-term borrowing and lending.
Capital Markets
Long-term securities (stocks and bonds).
Foreign Exchange Markets
Currency trading
Derivatives Markets
Contracts based on the value of underlying assets.
Commercial Banks
Accept deposits, provide loans, and offer financial services.
Investment Banks
Assist in raising capital, provide advisory services, and facilitate mergers and acquisition
Retail banking
also known as consumer banking or personal banking, is banking that provides financial services to individual consumers rather than businesses.
Insurance Companies
Provide risk management through insurance.
Pension Funds
Manage retirement savings.
Mutual Funds
Pool funds from investors to buy securities.
Hedge Funds
Invest in a variety of assets to achieve high returns.
Financial instruments
are assets that can be traded, or they can also be seen as packages of capital that may be traded.
Nominal Interest Rates
The stated interest rate without adjusting for inflation.
Real Interest Rates
The interest rate adjusted for inflation.
Fixed Interest Rates
Rates that remain the same for a set period.
Variable Interest Rates
Rates that can change based on market conditions.
Exchange Rates
The price of one currency in terms of another. Exchange rates affect the competitiveness of exports and imports.
Regulation
refers to the laws and rules governing the operation of financial markets.