| Term | Definition |
|---|
| Functions of money | medium of exchange, store of value, and a unit of account |
| M1 | the measure of the money supply that includes only the most liquid (spendable) forms of money |
| M2 | the measure of the money supply that includes all the components of M1 plus the forms of money that can be easily converted into spendable form |
| FED (Federal Reserve System) | the nation's central bank; produces money and lends money to the govt |
| FDIC | one of the primary agencies responsible for ensuring a sound, competitive financial system |
| Functions of FED | lend money at intererst to banks, store "required reserve funds" for banks, and clears checks for banks |
| Reserve Requirement | the percentage of a bank's deposits that it has to hold with the FED |
| Money | anything generally accepted as a means of paying for goods and services |
| Currency | government issued paper money and metal coins |
| Demand Deposits | money u deposit into ur checking account, which is available immeadiatly through checks, written orders, etc |
| Time Deposit | bank funds that cannot be withdrawn without notice/transferred by check |
| Mutual Fund (Money Market) | fund of short term, low risk financial securities purchased with the assets of investor-owners, pooled by a nonbank institution |
| Savings deposit | these have declined in popularity... |
| Commercial bank | fed. or state chartered financial institution accepting deposits that it uses to make loans and earn profits |
| S and L (Savings and Loan Association) | financial institution accepting deposits and making loans primarily for home martgages |
| Mutual Savings bank | financial institution whose depositors are owners sharing in its profits |
| Credit Union | financial institution that accepts deposits from, and makes loans to, only its members, usually employees of a particular organization |
| Pension Fund | non-deposit pool of funds managed to provide retirement income for its members |
| insurance company | non-deposit institution that invests funds collected as premiums charged for insurance coverages |
| Finance Company | non-deposit institution that specializes in making loans to businesses and consumers |
| Broker (securities investment dealer) | non-deposit institution that buys and sells stocks and bonds both for ivestors and for its own accounts |
| Pension Services | tax-deferred pension fund w. which wage earners supplement other retirement funds |
| Trust Services | bank management of an individual's investments, payment, or estate |
| ATM (automated teller machine) | electronic machine that allows customers to conduct account-related activities 24/7 |
| EFT (electronic funds transfer) | communication of fund-transfer info over wire, cable or microwave |
| Board of Governors | 7 member board that establishes the over policy of the FED; controlls money supply.... |
| Reserve banks | 12 administrative areas that have seperate reserve deposits and sets discount rate for commercial banks |
| Member banks | nationally chartered commercial banks (and some state-chartered banks) of the FED |
| Government's Bank | the fed SUPPLIES the nation's currency and LENDS money to the govt. to finance the nat. deficit |
| banker's bank | individual banks can borrow from the FED and pay interest on the loans |
| Float | The time between your writing of a check and the deduction from your account |
| monetary policy | a guideline for influencing the nation's economy and managing the money supply and interests rates |
| Discount rate | the interest rate that the FED charges on loans to commercial banks, etc which inturn affects the prime rate they charge their best customers |
| Open market operations | the tool most frequently used by the FED to carry out monetary policy; buying and selling govt bonds |
Combine with other sets
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