Chapter 24 Flashcards
coins
metallic forms of money such a pennies, nickels, dimes - and the Booker T. Washington half-dollar discussed in the feature that began this section
metallic forms of money such a pennies, nickels, dimes - and the Booker T. Washington half-dollar discussed in the feature that began this section
coins
currency
includes both coins and paper money
includes both coins and paper money
currency
commercial banks
financial institutions that offer full banking services to individuals and businesses
financial institutions that offer full banking services to individuals and businesses
commercial banks
savings and loan associations (S & Ls)
financial institutions that traditionally loaned money to people buying homes; they also take deposits and issue savings accounts in return; today they perform many of the activities that commercial banks do
financial institutions that traditionally loaned money to people buying homes; they also take deposits and issue savings accounts in return; today they perform many of the activities that commercial banks do
savings and loan associations (S&Ls)
Credit unions
-work on a not-for-profit basis
-often sponsored by large businesses, labor unions, or government institutions
-they are open only to members of the group that sponsors them
-they give these workers a financial institution that has low costs
Federal Deposit Insurance Corporation (FDIC)
a federal corporation that insures individual accounts in financial institutions for up to $100,000 (now it’s $250,000)
a federal corporation that insures individual accounts in financial institutions for up to $100,000 (now it’s $250,000)
Federal Deposit Insurance Corporation (FDIC)
central bank (of the United States)
what the Federal Reserve System, known as the Fed, is:
what the Federal Reserve System, known as the Fed, is:
central bank (of the United States)
Federal Open Market Committee (FOMC)
-major policy-making group within the Fed
-makes the decisions that affect the economy as a whole by manipulating the money supply
-has 12 members (7 permanent members of the Board, other 5 come from the district banks and their membership is rotated)
-major policy-making group within the Fed
-makes the decisions that affect the economy as a whole by manipulating the money supply
-has 12 members (7 permanent members of the Board, other 5 come from the district banks and their membership is rotated)
Federal Open Market Committee (FOMC)
monetary policy
-controlling the supply of money and the cost of borrowing money - credit - according to the needs of the economy
-the Fed can increase the supply of money or decrease the supply
-controlling the supply of money and the cost of borrowing money - credit - according to the needs of the economy
-the Fed can increase the supply of money or decrease the supply
monetary policy
discount rate
the rate the Fed charges member banks for loans
the rate the Fed charges member banks for loans
discount rate
reserve (requirement)
a certain percentage of their money that banks must keep in the Federal Reserve Banks as a “reserve” against their deposits
a certain percentage of their money that banks must keep in the Federal Reserve Banks as a “reserve” against their deposits
reserve (requirement)
open market operations
purchase or sale of U.S. government bonds and Treasury bills
purchase or sale of U.S. government bonds and Treasury bills
open market operations
checking accounts
allow customers to write checks or use check cards
purchase or sale of U.S. government bonds and Treasury bills
checking accounts
savings accounts
banks pay interest to customers based on how much money they have deposited
banks pay interest to customers based on how much money they have deposited
savings accounts
certificates of deposit (CDs)
Customers loan a certain sum to the bank for a specific period of time. In return, the bank pays interest during that time period. When the time period ends, the customers can turn in their certificates and regain control of their money. They cannot withdraw their money any sooner unless they pay a substantial penalty
Customers loan a certain sum to the bank for a specific period of time. In return, the bank pays interest during that time period. When the time period ends, the customers can turn in their certificates and regain control of their money. They cannot withdraw their money any sooner unless they pay a substantial penalty
certificates of deposit (CDs)
