Ch16 Flashcards
Money
Anything people generally accept as payment for goods and services
Bater
The direct trading of goods or services for other goods or services
Money supply
The amount of money the Federal Reserve makes available for people to buy goods and services
M-1
Money that can be accessed quickly and easily (coins, paper money, checks, travelers checks, etc. )
M-2
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)
M-3
Is M-2 plus big deposits like international money market funds
Reserve requirement
A percentage of commercial banks checking and savings accounts, they must keep in the bank
Discount rate
The interest rate the fed changes for loans to member bank
Commercial bank
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
Demand deposit
The technical name for a checking account, the money in a demand deposit can be withdrawn any time on demand from the depositor
Time deposit
The technical name for a savings account, the bank can require prior notice before the owner withdraws money for a time deposit
A certificate of deposit (CD)
I time deposit savings account that earns interest to be delivered on the certificates maturity date
credit union
Nonprofit member-owned financial cooperatives that offered the full variety of banking services to their members
Nonbanks
Financial organizations thet accept no deposits but offer many of the services provided by regular banks
Pension funds
Money put aside by corporations, nonprofit organizations, or unions to help fund their members financial needs when they retire
Federal deposit insurance corporation (FDIC)
An independent agency of the U.S. government that insures bank deposits
Deposit insurance fund (DIF)
Covers all deposits above the FDIC limits at member banks
Electronic fund transfer (EFT) system
A computerized system that electronically performs financial transaction ( such as making purchase, paying bills, and receiving paycheck)
Debit card
An electronic funds transfer tool that serves the same function as checks (withdraws funds from a checking account)
Smart card
An electronic funds transfer tool that combines a credit card, debit card, phone card, driver’s license card and more
Letter of credit
A promise by the bank to pay the seller a given amount if certain conditions are met
Banker’s acceptance
Promises that the bank will pay some specified amount at a particular time
World bank
A bank primarily responsible for financing economic development, also known as the international Bank of reconstruction and development
International monetary Fund (IMF)
Organization that assists this smooth flow of money among Nations
Open market operations
The buying and selling of U.S. government bonds by the fed with the goal of regulating the money supply
Savings and loan association (S&L)
A financial institution that accepts both savings and checking deposits and provides home mortgage loan
