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.