Saad Khan
ECON 3311
1/30/17
1175621
ECON 3311: Money & Banking
HOMEWORK #2
Write out definitions for the following terms. You can use any source including lecture notes,
a textbook, and the “Dictionary” link at www.investopedia.com.
Money – any item that is expected in the exchange of goods and services.
Barter – Exchange (goods or services) for other goods and services without using money.
Monetary Aggregates – Measures of money used in the overall economy.
Liquidity – How fast an asset can be used in the overall economy.
M1 – Currency + total checkable deposits + traveler’s checks.
Transaction deposits – a term used by the Federal Reserve for checkable deposits and
other accounts that can be used directly as cash without withdrawal limits or restric0ons
M2 – M1 + Saving Deposits + small denomina0on 0me deposits (<100K) + retail money
funds
Time deposits – a deposit in a bank account that cannot be withdrawn before a set date
