Glossary Terms:

Economic Spotter: Money in Revolutionary Times

Glossary terms from:


A financial institution that provides various products and services to its customers, including checking and savings accounts, loans and currency exchange.


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


An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.


The money in circulation in any country.


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

Federal Reserve

The central bank of the United States. Its main function is controlling the money supply through monetary policy. The Federal Reserve System divides the country into 12 districts, each with its own Federal Reserve bank. Each district bank is directed by its nine-person board of directors. The Board of Governors, which is made up of seven members appointed by the President and confirmed by the Senate to 14-year terms, directs the nation's monetary policy and the overall activities of the Federal Reserve. The Federal Open Market Committee is the official policy-making body; it is made up of the members of the Board of Governors and five of the district bank presidents.

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.


A piece of work usually done on order at an agreed-upon rate. Also a paid position of regular employment.


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.

Paper Money

Certificates of various denominations generally recognized and accepted as a medium of exchange within a nation and elsewhere. Paper money is issued and backed by national governments or, in the case of the euro, by a group of governments.


Earnings from an investment, usually expressed as an annual percentage.


To keep money for future use; to divert money from current spending to a savings account or another form of investment.


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


Use money now to buy goods and services.


The exchange of goods and services for money or other goods and services.