Wednesday, 24 October 2012
Price Level
Price Level - The overall level of prices of goods and services in an economy. This isused in the calculationof inflation rates.
Nominal Interest
Nominal Interest - The percent of the amount borrowed paid each year to the lender by the borrower in return for the use of the money not taking inflation into account.
Purchasing Power
Purchasing Power - The real value of a dollar. This describes the quantity of goods and services that can be purchased for a dollar, taking into account the effects of inflation.
Quantity Theory of Money
Quantity Theory of Money - The theory that says that the value of money is based on the amount of money in circulation, that is, the money supply.
Liquidity
Liquidity - The ease with which somethingof value can be exchanged for the currency of an economy.
Fiat Money
Fiat Money - Money that has no intrinsic value, that is, its only value comes from the fact that a governing body backs and regulates the currency.
Store of Value
Store of Value - A good that holds a value in such a way that its price is fairly insensitive inflation.
money
money-coins and paper currency issued by a government for payment of debts and for purchase of goods and services.
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