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Ch. 11- Money and Banking

Content Vocabulary p. 276

1. Federal Reserve System- privately owned, publicly controlled, central bank of the

United States

2. Federal Reserve Notes-currency issued by the Fed that eventually replaced all

other types of federal currency

3. Barter Economy- a moneyless economy that relies on trade

4. Commodity Money- (money that has alternative use) corn, hemp, gunpoweder

5. Fiat Money- money by government decree (has no alternative value)

6. Medium of Exchange- accepted by all parties as payment for goods and services

7. Measure of Value- used to express the worth of something, expressed as dollars

and cents in the US

8. Store of Value- Holds purchasing power until buyer needs it

9. State Bank- bank that receives its charter from the state in which it operates
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10. Legal Tender- fiat currency that mud be accepted for payment by decree of

government

11. National Bank- commercial bank chartered by the National Banking System;

member of the Fed

12. National Currency- currency backed by government bonds, issued by national

banks starting in 1863 and generally disappearing from circulation in the 1930s

13. Gold Certificates- paper currencies backed by gold; issued in 1863 and popular

until recalled in 1934

14. Silver Certificates- paper currency backed by, and redeemable for, silver from

1878 to 1968

15. Gold Standard- the system by which the value of a currency was defined in

terms of gold, for which the currency could be exchanged.

16. Central Bank- An institution designed to oversee the banking system and

regulate the quantity of money in the economy

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17. FDIC- the U.S. corporation insuring deposits in the United States against bank

failure.

18. Credit Union- nonprofit service cooperative that accepts deposits, makes loans,

and provides other financial services

19. Corporation- a legal entity that is separate and distinct from its owners.

20. State-Chartered Bank- a financial institution that is chartered by a state.

21. CDs- A certificate of deposit (CD) is a savings certificate with a fixed maturity

date, specified fixed interest rate and can be issued in any denomination aside from

minimum investment requirements.

22. Reserve Requirement- a central bank regulation employed by most, but not all,

of the world's central banks, that sets the minimum amount of reserves that must

be held by a commercial bank.