Money and Banking flashcards

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What is meant by “Medium of exchange” in this lesson?Functions of money: A medium of exchange is widely accepted in payment for goods and services.
What is meant by “Unit of account” in this lesson?Functions of money: A unit of account provides a common measure for prices and obligations.
What is meant by “Store of value” in this lesson?Functions of money: A store of value transfers purchasing power over time imperfectly when prices or risk change.
What is meant by “Liquidity” in this lesson?Functions of money: Liquidity describes ease of converting an asset into payment without substantial loss or delay.
What is meant by “Barter” in this lesson?Functions of money: Barter exchanges goods or services directly without a monetary intermediary.
What is meant by “Fiat money” in this lesson?Functions of money: Fiat money derives monetary acceptance from institutions and conventions rather than commodity convertibility.
What is meant by “Deposit” in this lesson?Banks and credit: A deposit is a bank liability representing money owed to a depositor under account terms.
What is meant by “Loan” in this lesson?Banks and credit: A loan provides funds with a contractual repayment obligation.
What is meant by “Interest” in this lesson?Banks and credit: Interest is payment associated with borrowing or lending over time.
What is meant by “Credit risk” in this lesson?Banks and credit: Credit risk is the risk a borrower will fail to meet obligations.
What is meant by “Bank liquidity” in this lesson?Banks and credit: Bank liquidity concerns capacity to meet payment and withdrawal needs.
What is meant by “Bank capital” in this lesson?Banks and credit: Bank capital is loss-absorbing funding distinct from deposits and reserves.
What is meant by “Central bank” in this lesson?Central banking and monetary policy: A central bank performs monetary and financial functions under its institutional mandate.
What is meant by “Monetary policy” in this lesson?Central banking and monetary policy: Monetary policy influences money and financial conditions to pursue stated goals.
What is meant by “Policy interest rate” in this lesson?Central banking and monetary policy: A policy rate guides targeted short-term borrowing conditions through operational tools.
What is meant by “Transmission mechanism” in this lesson?Central banking and monetary policy: Transmission describes how monetary changes affect financial conditions, spending, and activity.
What is meant by “Inflation expectations” in this lesson?Central banking and monetary policy: Expectations about future prices can affect current wage, pricing, and spending choices.
What is meant by “Monetary-policy limitation” in this lesson?Central banking and monetary policy: Policy effects depend on lags, shocks, institutions, and responses and are not exact guarantees.