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Economics 230 2


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An instruction to the bank to take funds from one account and transfer them to another.
Commodity Money
Precious metals or other items with intrinsic value that are used as money.
Credit Card
A promise by a bank to lend the cardholder money in order to make a purchase
Paper money- dollar bills or euro notes.
Currency in the hands of the public
The quantity of dollar bills held by the nonbank public; part of M1.
Debit card
A card that provides instructions to the bank to transfer funds from the cardholder's account directly to a merchant's account.
Demand Deposit
Standard Checking accounts that pay no interest; part of M1.
Electronic funds transfer (EFT)
Movements of funds directly from one account to another over and electronic network.
Private money, as represented by a claim on the issuer which is stored on an electronic device.
Dollar-denominated deposits outside the US; Eurodollars held by US citizens are part of M3.
Fiat Money
Currency with no intrinsic value, it has a consequence of government decree.
Gross domestic product (GDP)
The market value of final goods and sercices produced in the economy during a year.
A sustained rise in the general price level; a situation in which the price of everything goes up more or less at the same time.
A measure of the ease with which an asset can be turned into a means of payment.
The narrowest monetary aggregate, which measures the most liquid means of payment available: currency, travelers' checks, demand depostits and other checkable deposits.

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