Duplicate of Duplicate of Review- Money, Banking & the Fed

This is a moneyless economy that relies on the "mutual coincidence of wants" to trade

• Barter

• Commodity Money

• Fiat Money

• Specie

Money created by a government decree that has no alternative value or use as a commodity

• Commodity Money

• Bond

• Specie

• Fiat Money

The ability of money to be accepted by all parties in a transaction

• Medium of Exchange

• Measure of Value

• Store of Value

• Portability

If you deposit funds into a savings account, money is functioning as a

• Medium of Exchange

• Measure of Value

• Unit of Currency

• Store of Value

M2 includes

• All of M1

• Small time deposit

• Savings Account Deposits

• All of the Above

The amount of a deposit that the bank currently keeps and puts into their vault

• Reserve Requirement

• Total Reserve

• Excess Reserve

• Interest Rate

What does the fractional reserve system mean?

• Banks keep a small portion of deposits & loan the rest

• Banks use fiat money as well as coins

• Banks report daily to the Federal Reserve

• Banks use cash and debit transactions

If a customer deposits $10,000 when the reserve ratio (rr) is 0.2. That bank may

• Loan out $10,000

• Loan out $9,000

• Loan out $8,000

• Loan out $2,000

The amount of new money the banking system generates with each dollar of deposits

• Money Multipliers

• Legal Reserves

• Excess Reserves

• Member Bank Reserves

1/RR

• Excess Reserve

• Legal Reserve

• Money Multiplier

• Reserve Requirement