Ch16

Question 1

Money

Answer 1

Anything people generally accept as payment for goods and services

Question 2

Bater

Answer 2

The direct trading of goods or services for other goods or services

Question 3

Money supply

Answer 3

The amount of money the Federal Reserve makes available for people to buy goods and services

Question 4

M-1

Answer 4

Money that can be accessed quickly and easily (coins, paper money, checks, travelers checks, etc. )

Question 5

M-2

Answer 5

Money included an m one plus money that will take a little more time to obtain (savings accounts, money market accounts, mutual funds, certificates of deposit, etc)

Question 6

M-3

Answer 6

Is M-2 plus big deposits like international money market funds

Question 7

Reserve requirement

Answer 7

A percentage of commercial banks checking and savings accounts, they must keep in the bank

Question 8

Discount rate

Answer 8

The interest rate the fed changes for loans to member bank

Question 9

Commercial bank

Answer 9

A profit seeking organization that receives deposits from individuals and businesses in the form of checking and savings accounts and uses these funds to make loans

Question 10

Demand deposit

Answer 10

The technical name for a checking account, the money in a demand deposit can be withdrawn any time on demand from the depositor

Question 11

Time deposit

Answer 11

The technical name for a savings account, the bank can require prior notice before the owner withdraws money for a time deposit

Question 12

A certificate of deposit (CD)

Answer 12

I time deposit savings account that earns interest to be delivered on the certificates maturity date

Question 13

credit union

Answer 13

Nonprofit member-owned financial cooperatives that offered the full variety of banking services to their members

Question 14

Nonbanks

Answer 14

Financial organizations thet accept no deposits but offer many of the services provided by regular banks

Question 15

Pension funds

Answer 15

Money put aside by corporations, nonprofit organizations, or unions to help fund their members financial needs when they retire

Question 16

Federal deposit insurance corporation (FDIC)

Answer 16

An independent agency of the U.S. government that insures bank deposits

Question 17

Deposit insurance fund (DIF)

Answer 17

Covers all deposits above the FDIC limits at member banks

Question 18

Electronic fund transfer (EFT) system

Answer 18

A computerized system that electronically performs financial transaction ( such as making purchase, paying bills, and receiving paycheck)

Question 19

Debit card

Answer 19

An electronic funds transfer tool that serves the same function as checks (withdraws funds from a checking account)

Question 20

Smart card

Answer 20

An electronic funds transfer tool that combines a credit card, debit card, phone card, driver’s license card and more

Question 21

Letter of credit

Answer 21

A promise by the bank to pay the seller a given amount if certain conditions are met

Question 22

Banker’s acceptance

Answer 22

Promises that the bank will pay some specified amount at a particular time

Question 23

World bank

Answer 23

A bank primarily responsible for financing economic development, also known as the international Bank of reconstruction and development

Question 24

International monetary Fund (IMF)

Answer 24

Organization that assists this smooth flow of money among Nations

Question 25

Open market operations

Answer 25

The buying and selling of U.S. government bonds by the fed with the goal of regulating the money supply

Question 26

Savings and loan association (S&L)

Answer 26

A financial institution that accepts both savings and checking deposits and provides home mortgage loan