Flashcard: Financial and Economic Concepts

Front

What is the total amount of monetary assets available in an economy at a specific time called?

Back

Money Supply

Front

Which term describes the ease with which an asset can be converted into cash without losing value?

Back

Liquidity

Front

What are bank account balances that can be withdrawn at any time without prior notice called?

Back

Demand Deposits

Front

What type of investment fund pools money to invest in short-term, low-risk financial instruments?

Back

Money Market Mutual Funds

Front

In which banking system do banks keep only a fraction of deposits as reserves and lend out the rest?

Back

Fractional Reserve Banking

Front

What is it called when a borrower fails to meet the legal obligations of a loan?

Back

Default

Front

A loan used to purchase real estate, where the property serves as collateral, is known as what?

Back

Mortgage

Front

What financial tool allows individuals to borrow funds up to a set limit to make purchases?

Back

Credit Card

Front

The cost of borrowing money, expressed as a percentage of the principal, is called what?

Back

Interest

Front

What is the original amount of money borrowed or invested, not including interest?

Back

Principal