UNIT 3 Vocab: CH. 10 Lesson 1

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Federal Reserve System (Fed)

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The central banking system of the United States, established in 1913, which regulates the nation's monetary policy, controls the money supply, and oversees banks to ensure financial stability.

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Barter Economy

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An economic system where goods and services are exchanged directly for other goods and services without the use of money.

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Monetary Unit

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The standard unit of currency in a country’s money system, such as the U.S. dollar or the euro.

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Legal Tender

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Currency that must be accepted for payment of debts, as mandated by the government.

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Fiat Money

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a type of currency that has value because a government declares it to be legal tender, rather than being backed by a physical commodity like gold or silver. Its value is based on trust in the government that issues it. Examples include the U.S. dollar, euro, and yen.

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Commodity money

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type of money that has intrinsic value because it is made of a valuable material or can be exchanged for a commodity. Examples include gold, silver, or salt.

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medium of exchange

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is anything that is widely accepted as a form of payment for goods and services. Money, such as coins, paper currency, or digital currency, is the most common medium of exchange.

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Measure of value

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is a function of money that allows goods and services to be compared and priced in a consistent way.

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store of value

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is an asset or form of money that maintains its value over time without depreciating significantly. It allows individuals to save wealth and use it in the future.

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Demand deposit accounts (DDAs)

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are bank accounts, such as checking accounts, that allow account holders to withdraw funds at any time without prior notice. These accounts provide easy access to money.