Chapter 10: Problem 1

Define: a. money supply b. currency c. Federal Reserve note d. demand deposit e. savings account f. near-money

Short Answer

Expert verified

Money supply is the total of all physical currency and demand deposits. Currency is the widely accepted medium of exchange for goods and services. A Federal Reserve Note is the most common type of U.S. paper currency. Demand deposit is an account from which deposited funds can be withdrawn at any time without any advance notice to the depository institution. A savings account is a deposit account that offers a modest interest rate. Near-money are assets not usable as cash but can be easily converted to cash.

Step by step solution

Define Money Supply

Money supply is the total value of monetary assets available in an economy at a specific time. It includes physical currency and demand deposits.

Define Currency

Currency is a system of money in general use in a particular country. It is a medium of exchange for goods and services, created and stored either physically (coins, banknotes) or digitally.

Define Federal Reserve Note

A Federal Reserve Note is a type of banknote issued by the Federal Reserve System, the central banking system of the United States. It is the most common type of U.S. paper currency.

Define Demand Deposit

A demand deposit is a deposit of money that can be withdrawn without prior notice. In other words, it's money you keep at the bank and can use at any time, such as money in your checking account.

Define Savings Account

A savings account is a deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.

Define Near-Money

Near-money refers to assets that are easily convertible into cash, such as short-term government bonds and treasury bills, but cannot be used as cash directly.

Unlock Step-by-Step Solutions & Ace Your Exams!

Full Textbook Solutions
Get detailed explanations and key concepts
Unlimited Al creation
Al flashcards, explanations, exams and more...
Ads-free access
To over 500 millions flashcards
Money-back guarantee
We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!