Chapter 4 Vocab Flashcards
Automatic teller machine (ATM)
a machine where you can make an electronic deposit
Bank draft
authorize someone to take money out of your bank account automatically to satisfy some financial obligation
Cashier’s check
a type a check that is written to a specific payee but charged against the bank instead of your account
Check
directs a bank to deduct money from your checking account to make a payment
Check register
keeps a record of your deposits, electronic transfers, and the checks you have written
Checking account
monetary account that allows the holder to write checks against money that has been deposited into it
Credit Union
functions similar to a bank, but has nonprofit status and is owned by its members
Debit card
enables you to withdraw cash from your account at ATMs, or pay directly for goods or services at businesses
Depository institutions
financial institutions that provide checking accounts, savings accounts, and loans
Discount rate
the Fed changes the interest rate it charges to the banks when it loans them money
Electronic funds transfer
when you authorize someone to access your bank account for payment or deposit
Federal Deposit Insurance Corporation (FDIC)
protects your money in case of bank failure
Federal Reserve System
serves as the central bank of the United States, and regulates banks
Fiat Money
has value not because the coins and bills have some value in their own right, but because the government says it has value
Inflation
sustained increase in level of prices
Monetary policy
raising or lowering of money supply
Money orders
purchased for cash so that the recipient can trust that the money they are receiving is worth what it says it is
National Credit Union Savings Insurance Fund
it provides deposit insurance with the same limits as FDIC insured deposits
Negotiable order of withdrawal (Now) accounts
function much like checking accounts except they pay a small amount of interest on money in the account
Nondepository institutions
provide certain financial services but don’t accept traditional deposits
Personal identification number (PIN)
allows you to access you bank account and deposit your check
Price level stability
making sure that we don’t have inflation
Safety deposit boxes
small containers located inside the bank vault and are used to store valuable documents
Travelers checks
checks written by a large financial institution with no payee specificed
