Vocabulary

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Vocabulary
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What is money?
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Anything customarily used as a medium of
exchange, a unit of accounting, and a store of
value
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What is a medium of exchange?
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Use of money in exchange for goods or services
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What is a barter?
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Exchange of goods and services for other goods
and services
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What is a unit of accounting?
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Use of money as a yardstick for comparing the
values of goods and services in relation to one
another
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What is store of value?
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Use of money to store purchasing power for later
use
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What is a commodity money?
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A medium of exchange such as cattle or gems that
has value as a commodity or good aside from its
value as money
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What is representative money?
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Money that is backed by an item of value, such as
gold or silver
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What is fiat money?
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Money that has value because a government fiat,
or order, has established it as acceptable for
payment of debts
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What is legal tender?
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Money that by law must be accepted for payment of
public and private debts
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What is overdraft checking?
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Checking account that allows a customer to write
a check for more money than exists in his or her
account
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What are electronic funds transfer (EFT)?
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System of putting onto computers all the banking
functions that in the past were handled on paper
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What are automated teller machines (ATM)?
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Unit that allows consumers to do their banking
without the help of a teller
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What is a checking account?
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Account in which deposited money can be withdrawn
at any time by wiring a check
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What are checkable deposits?
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Money deposited in a bank that can be withdrawn
at any time by presenting a check
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What are thrift institutions?
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Mutual savings banks, SLs, and credit unions
that offer many of the same services as
commercial banks
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What is a debit card?
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Device used to make cashless purchases money is
electronically withdrawn from the consumers
checkable account and transferred directly to the
stores bank account
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What are near moneys?
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Assets, such as savings accounts, that can be
turned into money relatively easily and without
the risk of loss of value
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What is a M1?
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Narrowest definition of the money supply
consists of moneys that can be spent immediately
and against which checks can be written
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What is a M2?
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Broader definition of money supply includes all
of M1, plus such near moneys as money market
mutual fund balances, certificates of deposit,
and Eurodollars
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