Money, Banking, & Finance
Key Terms
Bonds
• Formal contract to repay borrowed money
and interest on the borrowed money at
regular future intervals.
Federal Reserve (FED)
• Privately owned, publicly controlled, central
bank of the United States.
Fiat Money
• Money by government decree; has no
alternative value or use as a commodity.
Financial Intermediaries
• Institutions that channel savings to investors;
banks, insurance companies, savings and loan
associations, credit unions.
Globalization
• Movement toward a more integrated and
interdependent world economy.
Gold Standard
• A system in which the basic unit of currency is
equivalent to, and can be exchanged for, a
specific amount of gold.
World Trade Organization (WTO)
• International agency that administers trade
agreements, settles trade disputes between
governments, organizes trade negotiations,
and provides technical assistance and training
for developing countries.
North American Free Trade Agreement
(NAFTA)
• Agreement signed in 1993 to reduce tariffs
among the United States, Canada, and
Mexico.
Trade Deficit
• Balance of payments outcome when spending
on imports exceeds revenues received from
exports.
Trade Surplus
• Situation occurring when the value of a
nation’s exports exceeds the value of its
imports.