Chapter 20 Flashcards
Anything that people generally accept as payment for goods and services
Money
The direct trading of goods or services for other goods or services
Barter
The amount of money the Federal Reserve Bank makes available for people to buy goods and services
Money Supply
Money that can be accessed quickly and easily (coins and paper money, checks, traveler’s checks etc)
M-1
Money included in M-1 plus money that may take a little more time to obtain (savings accounts, money market accounts, mutual funds, certificates of deposit, etc. )
M-2
M-2 plus big deposits like institutional money market funds
M-3
A percentage of commercial banks checking and savings accounts that must be physically kept in the bank
Reserve Requirement
The buying and selling of U.S government bonds by the Fed with the goal of regulating the money supply
Open-Market Operations
The interest rate that the Fed charges for loans to member banks
Discount Rate
A profit-seeking organization that receives deposits from individuals and corporations in the form of checking and saving accounts and then uses some of these funds to make loans
Commercial Bank
The technical name for a checking account; the money can be withdrawn anytime on demand from the depositor
Demand Deposit
The technical name for a savings account; the bank can require prior notice before the owner withdraws money
Time Deposit
A time-deposit (savings) account that earns interest to be delivered at the end of the certificate’s maturity date
Certificate of Deposit (CD)
A financial institution that accepts both saving and checking deposits and provides home mortgage loans
Savings and Loan Association (S&L)
Non-profit, member-owned financial cooperatives that offer the full variety of banking services to their members
Credit Unions
Financial Organization 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)
Nonbanks
Amounts of money put aside by corporations, nonprofit organizations, or unions to cover part of the financial needs of members when they retire
Pension Funds
An independent agency of the U.S. government that insures bank deposits
Federal Deposit Insurance Corporation (FDIC)
The part of the FDIC that insures holders of accounts in savings and loan associations
Savings Association Insurance Fund (SAIF)
A computerized system that electronically performs financial transactions such as making purchases , paying bills and receiving paychecks
Electronic Funds Transfer (EFT) System
An electronic funds transfer tool that serves the same function as checks: it withdraws funds from a checking account
Debit Card
An electronic funds transfer tool that is a combination credit card, debit card, phone card, drivers license card, and more
Smart Card
A promise by the bank to pay the seller a given amount if certain conditions are met
Letter of Credit
A promise that the bank will pay some specified amount at a particular time
Banker’s Acceptance
The bank primarily responsible for financing economic development; also known as the International Bank for Reconstruction and Development
World Bank
Organization that assists the smooth flow of money among nations
International Monetary Fund (IMF)
