3. Money and Credit
Glossary (Money and Credit)
1. Barter System : The system of exchanging goods is known as Barter system.
2. Double coincidence of wants : It means both parties i.e. buyer a seller have to agree to sell and buy each other commodities.
3. Cheque : It is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been made.
4. Cash Reserve Ratio : The part of the total deposit which the bank keeps with itself in cash form is called cash Reserve Ratio.
5. Credit : An agreement in which lender supplies the borrower with money, goods or services in return for the promise of future payment.
6. Formal lender Resources : There include those resources which are controlled by the government. e.g. Banks & Cooperatives.
7. Informal lender resources : These include money lenders, traders, friends and relatives.
8. Debt trap : It is a situation which pushes the borrower into a situation from which recovery is very painful.
9. Money : Any things which is generally accepted by the people in exchange of goods or services or in repayment of debts.
10. Demand Deposits : Deposits in the bank which are payable on demand are called demand deposits.