Glossary Terms:

Money is What Money Does

Glossary terms from:


A written order to a financial institution directing the financial institution to pay a stated amount of money, as instructed, from the customer's account.


Government-issued pieces of metal that have value and are used as money.


The money in circulation in any country.


The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.


Trading a good or service for another good or service, or for money.

Functions of Money

Money functions as a medium of exchange, a store of value, and also a unit of account.


Tangible objects that satisfy economic wants.

Law of Supply

As the price of a good or service that producers are willing and able to offer for sale during a certain period of time period rises (or falls), the quantity of that good or service supplied rises (or falls).


The study of economics concerned with the economy as a whole, involving aggregate demand, aggregate supply, and monetary and fiscal policy.


Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Productive Resources

Natural resources, human resources, capital resources and entrepreneurship used to make goods and services.


In a credit arrangement, the total amount spent during the billing cycle.

Purchasing Power

The amount of goods and services that a monetary unit of income can buy.


A decline in the rate of national economic activity, usually measured by a decline in real GDP for at least two consecutive quarters (i.e., six months).


The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.


Activities performed by people, firms or government agencies to satisfy economic wants.


The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time. Normally, as the price of a good or service rises (or falls), the quantity supplied of the good or service rises (or falls).