Monetary Policy & Central Banking NAME: Navarro, Gedah M. Date: February 9, 2022 Assessment Task 3. The following are common words on introduction to basic finance. Give definition on the following terms from Mindtap chapter 2 flashcards using the expanding my business vocabulary. EXPANDING MY BUSINESS VOCABULARY 3 TERMS and Definition 1. Money - Anything that is generally acceptable in exchange for goods and services and/or repayment of debt. 2. Dollarization - The situation when market participants use another country’s currency as money. 3. Legal Tender - Assets accepted for repayment of debt to the government as well as private transactions. 4. Medium of Exchange - A good that is accepted by both sides in a transaction. 5. Double Coincidence of Wants - The situation where each party wants what the other has to offer for sale. 6. Unit of Account - An agreed-upon method of placing relative value on assets. 7. Store of Value - A money must retain some of its purchasing power over time. 8. Commodity of Money - Money that has some other use other than being a medium of exchange, being a unit of account, and having a store of value. 9. Fiat Money - An asset that functions as money but has no intrinsic value. 10. Monetary Aggregates - Broad measurements of the total amount of money within an economic system. Also referred to as the money supply or money supplies. 11. Disintermediation - The removal of funds from a financial intermediary (e.g., a bank) to invest them directly, as through a mutual fund. 12. Time Value of Money - Money received today has a higher value than money received in the future. 13. Time Preference - The rate at which a person will prefer to consume today as opposed to consuming in the future. A high time preference implies a person wants very much to consume now as opposed to in the future. A low time preference implies a person is indifferent between consuming now or in the future. 14. Compound Interest - Interest earned on the principal plus interest. 15. Future Value - The nominal value of an asset, such as money, at some point in time in the future. 16. Cryptocurrency – A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority. Chapter 1 Content Reflection: Money, Money Supply, and Interest. As we go about our daily lives, those are the three things we rely on and implement. Most importantly, we utilize it to purchase our wants and needs, especially with money. Some of us, on the other hand, are more concerned with our wants than our needs. In certain cases, we overspend on things we want to buy or eat, and we forget to save more money, especially now that we're in the midst of a pandemic, and we forget to do so. And we don't even save enough for our tithes because we spend too much money. The first thing to think about is how to use or spend money on our needs and spend it by thinking or planning on what you want to buy. Money provides us with our necessities, which is good. However, money can also be harmful to us. If you're so rich, it can damage your spiritual, mental, and emotional well-being. Why? Because if you’re successful, of course, you have a lot of things to do at work, a lot to go, to meet, and you need to manage your company. And if you become bankrupt or lose all of that, you become stressed, depressed, and can ruin your mental and emotional health. It can also damage your spirituality. You have a lot of money, but you didn’t follow what’s in Malachi 3:10. It says, "Bring ye all the tithes into the storehouse, that there may be meat in my house; and prove to me now herewith, saith the LORD of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it." Give your tithes to him, because we all know that all things, small or big, aren’t us. Through tithes, we show that we never forget the LORD. In addition, the way money is spent has to be equally distributed. Let's start by saving for our tithing. Second, buy what you want and need. Finally, save some money for an emergency. My money management skills are currently lacking, but if I have my own, I will follow these methods.
