Understanding Economics Chapter 10.1 Vocabulary

3. money by government decree; has no alternative value or use as a commodity
4. narrow definition of money supply conforming to money’s role as medium of exchange; components include coins, currency, checks, other demand deposits, traveler’s checks
7. money that has an alternative use as an economic good; gunpowder, flour, corn, etc.
9. A medium of exchange is something accepted by all parties as payment for goods and services. Throughout history, people have used various materials as a medium of exchange, including colored shells, tobacco, gold, silver, and even salt.
11. an overthrow of government
12. money in the form of gold or silver coins

1. standard unit of currency in a country’s money supply; American dollar, British pound, etc.
2. moneyless economy that relies on trade or barter
3. privately owned, publicly controlled, central bank of the United States
4. Money serves as a measuring stick used to express the worth of something in terms that most people understand. In the United States, this worth is expressed in dollars and cents.
5. account whose funds can be removed from a bank or other financial institution by writing a check or using a debit card
6. paper currency issued by the Fed that eventually replaced all other types of federal currency
8. broad definition of money supply conforming to money’s role as a medium of exchange and store of value; components include M1 plus savings deposits, time deposits, and money market funds
10. The feature of money that allows purchasing power to be saved until needed. For example, you can spend your money on something now, or wait and spend your money later.