Match the following definitions with the correct terms or phrases: Question 1 options: 17 Rules set by the central bank that determine the minimum reserve ratio for a bank. 20 A measure used to set prices and make economic calculations. 13 The ratio of the money supply to the monetary base. 16 The fraction of deposits that a bank holds as reserves. 11 A policy that involves changes in the quantity of money in circulation or in the interest rate, or both. 9 The ease with which an asset can be converted into the medium of exchange. 8 A medium of exchange that drives its value entirely from its official status as a means of payment. 15 A purchase or sale of government treasury bills by the central bank, undertaken to change the monetary base, which in turn changes the money supply. 2 The direct exchange of goods or services without the use of money. 5 Assets (such as coins, treasury notes, and banknotes) that are in circulation as a medium of exchange. 6 Assets that are held in banks and can be used on demand to make transactions, such as checking accounts. 19 An asset that is a means of holding purchasing power over time. 4 An asset that individuals acquire for the purpose of trading rather than for their own consumption. 7 A bank's reserves over and above the reserves required by law or regulation. 12 The total value of financial assets in the economy that are considered money. 4 A good that is used as a medium of exchange but also has intrinsic value because it has other uses. 3 An institution that oversees and regulates the banking system and controls the monetary base. 1 The rate of interest set by a central bank in a country at which it lends money to other banks. 10 Any asset that can easily be accepted for purchase of goods and services. 18 The money that banks have received from depositors but have not used to make loans. 1. bank rate 2. barter 3. central bank 4. commodity money 5. currency 6. demand deposits 7. excess reserves 8. fiat money 9. liquidity 10. medium of exchange 11. monetary policy 12. money 13. money multiplier 14. money supply 15. open-market operations 16. reserve ratio 17. reserve requirement 18. reserves 19. store of value 20. unit of account