BJU Economics Ch. 10

the exchange of one person’s goods or services for another’s goods or services
the authorization for a bank to exist, issued either by the federal government or by the state government
commercial bank
a financial institution that accepts deposits and makes commercial and private loans
commodity money
a commonly used or valued good that serves as a medium of exchange
credit unions
a cooperative institutions that pools the savings of its members and makes consumer loans available to them
double coincidence of wants
both parties involved in a trade of goods or services wanting what the other has to trade
fiat money
money that is not backed by anything of value but serves as money because of governmental decree
financial market
the vast collection of financial institution that receive deposits of excess funds from households and that lend to business firms; includes commercial banks, savings and loan associations, credit unions, insurance companies, finance companies and stockbrokerage firms
fractional reserve banking
a system in which a banker lends out more paper money than he can back
full-bodied coin
a coin that contains an amount of gold or silver of equal worth to its face value
legal tender
a form of money that a government declares must be accepted by creditors if it is tendered (offered) by a debtor
a measure of the nation’s money supply that is available for immediate spending and includes currency, traveler’s checks, and checking accounts
a measure of the nation’s money supply that includes all M-1 money plus all money that is available to spend after a short delay, such as savings accounts, small-time deposits, and other short-notice deposits
anything that is commonly used and generally accepted in payment for goods and services; a medium of exchange
mutual funds
privately managed stock portfolios
representative money
money that represents a commodity held in store
savings and loan associations (S&L’s)
a financial institution designed to collect savings and use that capital to make loans
token coin
a coin that contains a quantity of metal worth less than its face value