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23 Cards in this Set
- Front
- Back
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medium of exchange
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usable for buying and selling goods and services
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unit of account
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used to measure the relative worth of a wide variety of goods, services, and resources
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store of value
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enables people to transfer purchasing power from the present to the future
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liquidity
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the ease with which an asset can be converted quickly into the most widely accepted and easily spent form of money
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Federal Reserve Notes
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paper money issued by the Federal Reserve Banks
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token money
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the face value of any piece of currency is unrelated to its intrinsic value, or the value of the physical materials out of which the piece of currency is constructed
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checkable deposits
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any deposit in a commercial band or thrift institution against which a check may be written
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commercial banks
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the primary depository institutions
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thrift institutions
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savings and loan associates, mutual savings banks, and credit unions collectively
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near-monies
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certain highly liquid financial assets that do not function directly or fully as a medium of exchange but can be readily converted into currency or checkable deposits
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M2
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a more broadly defined money supply, equal to M1 plus non-checkable savings accounts, small time deposits, and individual money market mutual fund balances
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savings account
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a deposit in a commercial bank or thrift institution on which interest payments are received
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money market deposit account (MMDA)
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an interest-bearing account containing a variety of interest-bearing short-term securities
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time deposits
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an interest-earning deposit in a commercial bank or thrift institution that the depositor can withdraw without penalty after the end for a specified period
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money market mutual fund (MMMF)
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interest-bearing accounts offered by investment companies, which pool depositors' funds for the purchase of short-term securities. depositors can write checks in minimum amounts or more against their accounts
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legal tender
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a legal designation of a nation's official currency
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Federal Reserve System
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the U.S. central bank, consisting of the Board of Governor and the 12 Federal Reserve Banks, which controls the lending activity of the nation's banks and thrifts and thus the money supply
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Board of Governors
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the central authority of the U.S. money and banking system; seven members appointed by the president
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Federal Reserve Banks
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twelve banks, which blend private and public control, that collectively serve as the nation's "central bank"
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Federal Open Market Committee (FOMC)
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aids the Board of Governors in conducting monetary policy; made up of 12 individuals
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financial services industry
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the broad category of firms that provide financial products and services to help households and businesses earn interest, receive dividends, obtain capital gains, insure against losses, and plan for retirement
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electronic payments
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purchases made by transferring funds electronically
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M1
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the most narrowly defined money supply, equal to currency in the hands of the public and the checkable deposits of the commercial banks and thrift institutions
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