Chapter 20 Flashcards

1
Q

The organization that is in charge of money

A

The Federal Reserve (Fed)

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2
Q

Anything that people generally accept as payment for goods and services.

A

Money

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3
Q

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

A

Barter

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4
Q

Five standards for money

A
Portability
Divisibility
Stability
Durability
Uniqueness
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5
Q

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

A

Money Supply

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6
Q

the amount of goods and services you can buy with dollar goes up or down

A

Rising dollar value and falling dollar value

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7
Q

A percentage of commercial banks’ checking and savings accounts that must be physically kept in the bank.

A

Reserve requirement

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8
Q

What are the three basic tools the Fed uses to manage money

A

Reserve requirement
Open market
Discount rate

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9
Q

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

A

Open-market operations

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10
Q

The interest rate that the Fed charges for loans to member banks.

A

Discount rate

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11
Q

Law that required to all federally chartered banks to join the Federal Reserve

A

Federal Reserve Act of 1913

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12
Q

Why was the Fed designed?

A

To prevent a run on banks repeat from 1907.

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13
Q

The most important move to protect the public from bank failures

A

Establish federal deposit insurance

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14
Q

The U.S. Banking system consists of

A

Commercial banks
savings and loan associations, and
credit unions

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15
Q

A profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans.

A

Commercial bank

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16
Q

The technical name for a checking account; the money can be withdrawn anytime on demand from the depositor.

A

Demand Deposit

17
Q

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

A

Time Deposit

18
Q

A time-deposit (savings) account that earns interest to be delivered at the end of the certificate’s maturity date.

A

Certificate of Deposit (CD)

19
Q

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

A

Savings and Loan association

20
Q

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

A

Credit Unions

21
Q

Financial organizations that accept no deposits but offer many of the services provided by regular banks (pension funds, insurance companies, commercial finance companies, consumer finance companies, and brokerage houses).

A

Nonbanks

22
Q

Three organizations created to protect individuals money

A

Federal Deposit Insurance Corporation (FDIC)
Savings Association Insurance Fund (SAIF)
National Credit Union Administration (NCUA)

23
Q

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

A

Federal Deposit Insurance Corporation (FDIC)

24
Q

The part of the FDIC that insures holders of accounts in savings and loan associations.

A

Savings Association Insurance fund (SAIF)

25
Q

Provides up to 250,000 coverage per individual depositor per institution

A

National Credit Union Administration (NCUA)

26
Q

A computerized system that electronically performs financial transactions such as making purchases, paying bills, and receiving paychecks.

A

Electronic funds transfer system

27
Q

An electronic funds transfer tool that serves the same function as checks: it withdraws funds from a checking account.

A

Debit card

28
Q

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

A

Smart card

29
Q

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

A

letter of credit

30
Q

A promise that the bank will pay some specified amount at a particular time.

A

Bankers acceptance

31
Q

The net result of international banking

A

to link the economies of the world into one interrelated system with no regulatory control.

32
Q

The bank primarily responsible for financing economic development; also known as the International Bank for Reconstruction and Development.

A

World Bank

33
Q

Organization that assists the smooth flow of money among nations.

A

International Monetary Fund (IMF)