Key Terms
Barter
Direct trade of goods/services without money Bond: debt contract; borrower repays principal plus interest over time Capi
Double coincidence of wants
Both parties must want what the other has, at the same time, in the right quantity. That almost never happens cleanly; t
Commodity-backed currency
Paper money exchangeable for a fixed amount of a commodity (like gold or silver). U.S.
Bank for International Settlements survey
58% of central banks reported trivial or no public adoption of crypto.
Growth factors
Smartphone saturation, tech company investment, retailer adoption. Fastest growth in underbanked markets (Africa, Asia,
Limiting factors
Security concerns, limited retailer acceptance, app fragmentation, no compelling reason to switch in markets where cards
Purpose
Keep money circulating locally rather than flowing to national or global retailers. No significant impact on national mo
Liquidity
How quickly a financial asset can be used to buy goods or services. Cash is highly liquid.
Board of Governors
Seven members appointed by the president, confirmed by the Senate.
Chair
Designated from the Board; controls the agenda and serves as public voice of the Fed.
Federal Open Market Committee (FOMC)
Makes open market operation decisions.
Additional responsibilities
Check processing rules, ensuring adequate currency circulation, enforcing consumer protection laws (no discrimination by
Downside of debt (both bank and bonds)
Scheduled interest payments are required regardless of income. Miss them and bondholders or banks can take the firm to c
Upside of debt
Firm keeps full operational control; no ownership sold.
Private company
Stock is not publicly traded; owned and transferred privately (sole proprietorship, partnership, LLC, or private corpora