Across
- 4. a measure of inflation typically calculated by taking the CPI and excluding volatile economic variables such as food and energy prices to better measure the underlying and persistent trend in long-term prices
- 7. the deposits of many investors are pooled together and invested in a safe way like short-term government bonds
- 8. the common way in which we measure market values in an economy
- 12. dollar bills or other currencies with values backed up by gold or another commodity
- 14. has no intrinsic value, but is declared by a government to be the country's legal tender
- 15. checkable deposit in banks that is available by making a cash withdrawal or writing a check
- 16. whatever serves society in four functions: as a medium of exchange, a store of value, a unit of account, and a standard of deferred payment.
- 19. item of value that a firm or an individual owns
- 23. bank account where you cannot withdraw money by writing a check, but can withdraw the money at a bank—or can transfer it easily to a checking account
- 26. the costs associated with finding a lender or a borrower for money
- 28. account that the depositor has committed to leaving in the bank for a certain period of time, in exchange for a higher rate of interest; also called certificate of deposit
- 31. a measure of inflation based on the prices of all the GDP components
- 32. funds that a bank keeps on hand and that it does not loan out or invest in bonds
- 35. a situation in which two people each want some good or service that the other person can provide
- 40. literally, trading one good or service for another, without using money
- 41. stores a certain value of money on a card and then one can use the card to make purchases
- 42. any amount or debt that a firm or an individual owes
- 44. a narrow definition of the money supply that includes currency and checking accounts in banks, and to a lesser degree, traveler’s checks.
- 45. a measure of inflation based on prices paid for supplies and inputs by producers of goods and services
- 47. a balance sheet with a two-column format, with the T-shape formed by the vertical line down the middle and the horizontal line under the column headings for “Assets” and “Liabilities”
- 48. something that serves as a way of preserving economic value that one can spend or consume in the future
- 49. a measure of inflation based on wages paid in the labor market
- 50. a loan a borrower uses to purchase a home in which the interest rate varies with market interest rates
Down
- 1. a measure of inflation based on the prices of merchandise that is exported or imported
- 2. a definition of the money supply that includes everything in M1, but also adds savings deposits, money market funds, and certificates of deposit
- 3. a measure of inflation that U.S. government statisticians calculate based on the price level from a fixed basket of goods and services that represents the average consumer's purchases
- 5. customers can withdraw a bank’s liabilities in the short term while customers repay its assets in the long term
- 6. a general and ongoing rise in price levels in an economy
- 9. a contractual provision that wage increases will keep up with inflation
- 10. whatever is widely accepted as a method of payment
- 11. a price, wage, or interest rate is adjusted automatically for inflation
- 12. the coins and bills that circulate in an economy that are not held by the U.S Treasury, at the Federal Reserve Bank, or in bank vaults
- 13. a hypothetical group of different items, with specified quantities of each one meant to represent a “typical” set of consumer purchases, used as a basis for calculating how the price level changes over time
- 17. helps an economy exchange goods and services for money or other financial assets
- 18. negative inflation; most prices in the economy are falling
- 20. sheet an accounting tool that lists assets and liabilities
- 21. total money in the economy divided by the original quantity of money, or change in the total money in the economy divided by a change in the original quantity of money
- 22. money must also be acceptable to make purchases today that will be paid in the future
- 24. goods bias inflation calculated using a fixed basket of goods over time tends to overstate the true rise in cost of living, because it does not account for improvements in the quality of existing goods or the invention of new goods
- 25. an institution that operates between a saver with financial assets to invest and an entity who will borrow those assets and pay a rate of return
- 27. institution that accepts money deposits and then uses these to make loans
- 29. an outburst of high inflation that often occurs (although not exclusively) when economies shift from a controlled economy to a market-oriented economy
- 30. like a check, is an instruction to the user’s bank to transfer money directly and immediately from your bank account to the seller
- 33. immediately transfers money from the credit card company’s checking account to the seller, and at the end of the month the user owes the money to the credit card company; a credit card is a short-term loan
- 34. making loans or investments with a variety of firms, to reduce the risk of being adversely affected by events at one or a few firms
- 36. capital a bank’s net worth
- 37. an item that is used as money, but which also has value from its use as something other than money
- 38. an inflation rate calculated using a fixed basket of goods over time tends to overstate the true rise in the cost of living, because it does not take into account that the person can substitute away from goods whose prices rise considerably
- 39. a unit-free number derived from the price level over a number of years, which makes computing inflation rates easier, since the index number has values around 100
- 43. the excess of the asset value over and above the amount of the liability; total assets minus total liabilities
- 46. arbitrary year whose value as an index number economists define as 100; inflation from the base year to other years can easily be seen by comparing the index number in the other year to the index number in the base year—for example, 100; so, if the index number for a year is 105, then there has been exactly 5% inflation between that year and the base year