Economics Chapter 10
representative money
Money that is backed by something tangible
Portability
Physical property of money
medium of exchange
The means through which goods and services are produced are called
standard of value
The measurement of economic worth in the exchange process
Which economic property of money refers to its use as a medium of exchange?
acceptability
money
anything that people will accept in exchange for goods and services
A major result of bank deregulation in the 1980s and 1990s was hundreds of
bank mergers
scarcity
economic property of money
From 1836 to 1863, there was no national oversight of banking. What was the result?
financial panics and economic instability
Which of the following allows banks to create money by making loans?
fractional reserve banking
The two original purposes of savings and loans were to take savings deposits and provide
home mortgage loans
Compound interest provides an additional incentive to save because
interest is applied to accumulated interest as well as the initial deposit
For what purpose was the First Bank of the United States created?
issue a national currency, control the money supply, and lend money
representative money
money backed by an item of value, such as salt, olive oil, gold, and silver
commodity money
money that has intrinsic value based on the material from which it is made
Fiat Money
money that is declared by the government to have worth
commodity money
money whose value us based on the type of material from which it is made
fiat money
money without intrinsic value and is used by government decree
currency
paper money and coins
A mortgage allows a consumer to
purchase a house without paying the whole value up front
near money
savings accounts and time deposits that can be converted into cash relatively easily
store of value
something with the ability to hold value over time
The term electronic banking generally refers to the use of
the Internet and computers to do bank transactions at home
barter
the exchange of goods and services without using money
What is the purpose of the Federal Reserve System?
to make loans to banks, issue currency, and regulate the money supply