A checkbook
is a folder or small book containing preprinted paper instruments issued to checking account holders and used to pay for goods or services.
What is it called when money has to withstand wear and tear?
Definition: The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as
depreciation
. Description: Depreciation, i.e. a decrease in an asset’s value, may be caused by a number of other factors as well such as unfavorable market conditions, etc.
What term describes the device that allows its holder to buy goods based on a promise to pay?
A negotiable instrument
is a signed document that promises a sum of payment to a specified person or the assignee. In other words, it is a formalized type of IOU: A transferable, signed document that promises to pay the bearer a sum of money at a future date or on-demand.
What are objects called that have value in and of themselves as well as value as a means of exchange?
Commodity money
is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves (intrinsic value) as well as their value in buying goods.
Is a system that keeps only a small part of a deposit on hand and lends out the rest?
What Is
Fractional Reserve Banking
? Fractional reserve banking is a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal. This is done to theoretically expand the economy by freeing capital for lending.
What is meant by promissory note?
A promissory note is a financial instrument that
contains a written promise by one party
(the note’s issuer or maker) to pay another party (the note’s payee) a definite sum of money, either on demand or at a specified future date.
Why are funds in checking accounts called demand deposits?
Closely related to currency are checkable deposits, also known as demand deposits. These are the amounts held in checking accounts. They are called demand deposits or checkable deposits
because the banking institution must give the deposit holder his money “on demand” when a check is written or a debit card is used.
What are the 4 types of money?
Economists identify four main types of money –
commodity, fiat, fiduciary, and commercial
. All are very different but have similar functions.
What are 3 types of money?
- Physical money. Physical money, meaning cash and coins, is created by the US Treasury. …
- Central bank reserves. Central bank reserves are a type of electronic money, created by the Federal Reserve and used by banks to make payments between themselves. …
- Commercial bank money.
Is objects used as money must withstand wear and tear?
Durability. Objects used as money must withstand
physical wear
and tear. People need to be able to take money with them as they go about their business. To be useful, money must be easily divided into smaller denominations , or units of value.
What sort of items have at one time or another been used as money?
Gold, silver, cowrie shells, cigarettes, and even cocoa beans
have been used as money. These items are examples of commodity money, which means they also have a value from use as something other than money. Gold, for example, has been used throughout the ages as jewelry or art, as well as money.
What is something that keeps its value if held?
| A B | store of value something that keeps its value if it is stored rather than used | currency coins and paper bills used as money | commodity money objects that have value in themselves and that are also used as money |
|---|
What is a medium of exchange quizlet?
medium of exchange.
anything that is used to determine value during the exchange of goods and services
.
barter
. the direct exchange of one set of goods or services for another. unit of account.
What type of money are we currently using?
Fiat money
is widely used today through the modern and even the developing worlds. These usually cover bank notes and coins. Such examples include the Euro, the US dollar and the Great British Pound. However, fiat money does not cover banknotes that people can exchange for gold or silver.
What are the three uses of money and give examples of each?
Money has three primary functions. It is
a medium of exchange, a unit of account, and a store of value
: Medium of Exchange: When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange.
Do banks lend out deposits?
Banks don’t “lend out” deposits
. They create new money ex nihilo when they lend. The amount of new money created is equal to the entire value of each loan. Banks don’t “lend out” reserves, except to each other.
