AP Economics Unit 4: Money and Financial Sector

an item that buyers give to sellers when they want to purchase goods and services

a means of holding purchasing power over time

a means for comparing the values of goods and services

M1

All of M1 + less immediate (liquid) forms of money to include savings, money market mutual funds, and small denomination time deposits.

the money in checking accounts

the ease with which an asset can be converted into cash

A relationship between the interest rate and the quantity of money that people are willing to hold at any given interest rate.

A share of ownership in a corporation.

a formal contract to repay borrowed money with interest at fixed intervals

an account with guaranteed interest for a period of time

T account showing assets and liabilities

money and other valuables belonging to an individual or business

debts that you owe

a banking system that keeps only a fraction of funds on hand and lends out the remainder

reserves that a bank is legally required to hold, based on its checking account deposits

a bank's reserves over and above its required reserves

the interest rate at which banks make overnight loans to one another

the lowest rate charged by a bank for a short-term loan

The interest rate on the loans that the Fed makes to banks

the purchase and sale of U.S. government bonds by the Fed

money multiplier

the interest rate actually paid for a loan

the interest rate corrected for the effects of inflation

a federally sponsored corporation that insures accounts in national banks and other qualified institutions

the rate at which money changes hands

the amount of money you would need to deposit today in order to accumulate a specific amount in the future

How much your money will be worth in the future if you invest it.