Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
money fiat money barter medium of exchange unit of account store of value liquidity M1 M2 financial system financial intermediaries return on investment tradeoff between risk and return teaser rates compounding effect vesting period pensions | The earnings, such as interest or capital gains, that a saver receives for making funds available to others. It is calculated as earnings divided by the amount invested. A complex set of institutions, including banks, bond markets, and stock markets, that allocate scarce resources (financial capital) from savers to borrowers. The effect of interest added to existing debt or savings leading to substantial growth in debt or savings over the long run. Anything that is accepted in exchange for goods and services or for the payment of debt. How quickly, easily, and reliably an asset can be converted into cash. Promotional low interest rates offered by lenders for a short period of time to attract new customers and to encourage spending. The narrowest definition of money that measures highly liquid instruments including currency (banknotes and coins), demand deposits (checks), and other accounts that have check- A retirement program into which an employer pays a monthly amount to retired employees until they die. The pattern of higher risk assets offering higher average annual returns on investment than lower risk assets. A function of money in which goods and services are sold for money, then the money is used to purchase other goods and services. A broader definition of money that includes “near monies” that are not as liquid as cash, including deposits in savings accounts, money market accounts, and money market mutual fund accounts. Money provides a yardstick for measuring and comparing the values of a wide variety of goods and services. It eliminates the problem of double coincidence of wants associated with barter. The function that enables people to save the money they earn today and use it to buy the goods and services they want tomorrow. Financial firms (banks, mutual funds, insurance companies, etc.) that acquire funds from savers and then lend these funds to borrowers (consumers, firms, and governments). The direct exchange of goods and services for other goods and services. Money without intrinsic value but nonetheless accepted as money because the government has decreed it to be money. The minimum number of years a worker must be employed before the company’s contribution to a retirement account becomes permanent. |