Macroeconomics Chapter 11
discount window
an instrument of monetary policy that allows eligible institutions to borrow money from the central bank; usually on a short term basis
medium of exchange
an item that buyers give to sellers when they want to purchase goods and services
store of value
an item that people use to transfer purchasing power from the present to the future
Intrinsic value
an item would have value, even if not used as money
during wars, the public tends to hold relatively more currency and relatively few deposits. This decision makes reserves...
and the money supply decrease
bank run
depositors who try to withdrawal their money from a bank because they think it will fail
the existence of money leads to...
greater specialization and a higher standard of living
commodity money
money that takes the form of a commodity with intrinsic value
fiat money
money without intrinsic value that is used as money because of government decree
fractional reserve banking
practice where banks reserve only a fraction of their customers deposits
money
the set of assets in an economy that people regularly use to buy goods and services from other people
unit of account
the yardstick people use to post prices and record debts