Homework #1 - Robert Garza ECON 3131.05 Homework#1...

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Robert Garza ECON 3131.05 Homework #1 Inflation - A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. Federal Reserve - A U.S. banking system that consists of 12 Federal Reserve banks, with each one serving member banks in its own district. This system, supervised by the Federal Reserve Board, has broad regulatory powers over the money supply and the credit structure. Money – Anything that functions as a medium of exchange, store of value, unit of account, and standard of deferred payment. Double coincidence of wants – The situation when two individuals are simultaneously willing and able to make a trade; a requirement for barter. Commodity money – A good with a non-monetary value that is also used as money. Fiat money – A token that has value only because it is accepted as money. E-money (electronic money) – Money that people can transfer directly via electronic impulses. Liquidity – The ease with which an asset can be sold or redeemed for a know amount of cash at short notice and at low risk of loss of nominal value.
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