Huy Nguyen
ID: 1780315
2/6/2018 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 writing item to be accepted in the exchange of goods and service
• Retail money fund: an investment account with capital invested by individual
investors.
• Barter: the act of trading goods or services between two or more parties without
the use of money
• Depository institution: a financial institution in the United States that is legally
allowed to accept monetary deposits from consumers.
• monetary aggregate: a measure of the amount of money in circulation within a
country or economic sector
• Adverse selection: refers generally to a situation where sellers have information
that buyers do not have, or vice versa, about some aspect of product quality.
• Liquidity: the term used to describe how easy it is to convert assets to cash.
• Liquidity risk: the risk stemming from the lack of marketability of an investment
that cannot be bought or sold quickly enough to prevent or minimize a loss.
• M1: a metric for the money supply of a country and includes physical money —
