fractional reserve banking
a banking system that keeps only a fraction of funds
on hand and lends out the remainder
failure to pay back a loan
a specific type of loan that is used to buy real estate
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n. anything that people will accept as payment for
goods and services (p. 288)
medium of exchange
n. a means through which goods and services can be
exchanged (p. 288)
n. the exchange of goods and services without using
money (p. 288)
price level & value of money
are opposite to each other.
The value of the money goes up & the other one goes
means of payment
You pay for something but you got no money.
To pay bills, buy groceries, to pay rent.
What was happening in the world and how was it
affecting the goldsmith's business?
The demand for credit was growing fast, as Europeans
spread out across the world. But his loans were limited by
the amount of gold his depositors had in his vault.
What is Mayer Amschel Rothschild (founder of the
House of Rothschild) often quoted as saying?
"Permit me to issue and control the money of a nation, and
I care not who makes its laws."
What is "fiat" [from Fr. "faire" der. from L. "facere" = to
money market mutual funds
A company or a bank that takes money from you and
invest for you.
The mutual fund company lease the money for the
The people who don't like the interest rate (don't get
anything) gives the money to the bank and they
Commercial banks and thrift institutions; financial
institutions that accept deposits from the public
passbook savings deposits
accounts sold to household customers in small
denominations along with a small booklet or
anything that serves as a
medium of exchange, a
unit of account, and a
store of value
medium of exchange
anything that is used to
determine value during
the exchange of goods and
the direct exchange of one
set of goods or services fo
Has only one function.
you can only buy with it.
useful for buying things.
Anything which can buy something.
Money was used as
Backing up U.S money supplies
Keep gold reserved against the money issu
Definition: the lowest price for labor (wage) that any employer may pay
Note: It is not set according to productivity.
Also, it is not indexed to inflation. It is set in nominal terms.
It is set by the Congress sporadically.