Econ Unit 3 Flashcards

Front

What are the three functions of money?

Back

Medium of Exchange, Unit of Account, and Store of Value.

Front

Medium of Exchange

Back

Something accepted by all parties as payment for goods and services.

Front

Unit of Account

Back

A common measure used to express the value of goods and services.

Front

Store of Value

Back

A property of money that allows purchasing power to be saved until needed.

Front

What are the four characteristics of money?

Back

Portability, Durability, Divisibility, and Limited Availability (Scarcity).

Front

Fiat Money

Back

Money that has value because the government has ordered that it is an acceptable means to pay debts.

Front

The Federal Reserve System (The Fed)

Back

The central bank of the United States.

Front

What is the primary role of the Fed?

Back

To regulate the U.S. money supply and supervise banking institutions.

Front

What is the structure of the Federal Reserve?

Back

A Board of Governors, 12 District Reserve Banks, and the Federal Open Market Committee (FOMC).

Front

Monetary Policy

Back

Actions by the Federal Reserve to expand or contract the money supply in order to affect the cost and availability of credit.