Money and Banking - Chapter 10

Front

An essential function for banks is creating money by

Back

loaning a portion of deposits.

Front

Anything that is used to determine value during the exchange of goods and services.

Back

Medium of Exchange

Front

Money must be easily divided into smaller denominations (ex. making change).

Back

Divisibility

Front

If you sell something and choose not to spend the money earned right away, the money is acting as a

Back

Store of Value

Front

The price paid for the use of borrowed money.

Back

Interest

Front

Money must withstand physical wear and tear from being used over and again.

Back

Durability

Front

People can take their money with them easily.

Back

Portability

Front

A type of money that has value because it can be exchanged for something else of value (ex. gold).

Back

representative money

Front

Which of these is an example of M1? Savings deposits, Property, Cash, Credit

Back

Cash

Front

Objects that have value in themselves and are also used as money.

Back

Commodity money