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36 Cards in this Set
- Front
- Back
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the study of money - how it's made, how it's lost and how it's managed
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finance
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anything generally accepted in exchange for goods in services, many materials have been used as money
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money
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acceped as payment for products and resources, inefficient because not always divisible and can be complicated in multiple-party transactions
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medium of exchange
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single standard for assigning and comparing values of products and resources
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measure of value
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means or retaining and accumulating wealth
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store of value
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1. acceptablilty
2. divisiblilty 3. portability 4. stability 5. durability 6. difficulty to counterfeit |
characteristics of money
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money stored in an account at a bank that can be withdrawn without advance notice
-checks serve as a more secure substitute for cash |
checking account(demand deposit)
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accounts with funds that usually cannot be withdrawn without advance notice
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savings account (time deposit)
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another type of money
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paper money and coins
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higher interest rates that standard bank rates with greater restricitons
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money market account
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savings account that garantee a set interest rate over a period of time providing funds are not withdrawn before maturity
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certificate of deposit (CDs)
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guardian of the American financial system, independent agaency of federal government, 1913 to regulate the nation's banking and financial industry
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federal reserve board (the fed)
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four major funcitons of the fed
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1)Controls the money supply with monetary policy
2)Regulates financial institutions 3)Manages regional and national check-clearing procedures 4)Supervises the federal deposit insurance of commercial banks in the Federal Reserve system |
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-The means by which the Fed controls the amount of money available in the economy
-Aims to keep supply and demand in balance to avoid inflation/deflation |
Monetary Policy
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decisions to buy or sell US Treasury bills in the open market
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open market operations
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percentage of deposits a bank must hold in reserve
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reserve requirements
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rate of interest the Fed charges to loan money to a banking institute
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discount rate
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establishes and enforces banking rules that effect monetary policy and compition
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regulating member banks
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national check processing through check clearinghouses
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check clearing
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supervises the federal insurance funds that protect the deposits in member banking institutes
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depository insurance
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-Largest and oldest of all financial institutions, relying mainly on checking and savings accounts
-Loan to businesses and individuals |
comercial banks
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savings and loan associations (thrifts)
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primarily offer saving accounts and make long-term loans for residental morgages
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financial institutions owned and controlled by depositors
-usually have a common employer, profession, trade group, religion |
credit union
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mutual savings banks
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similar to S&L but owned by depositors
-New England |
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Federal Deposit Insurance Corporation (FDIC)
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insures personal accounts up to $250,000
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National Credit Union Association (NCUA)
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-Regulates and charters credit unions
-Insures deposits through its National Credit Union Insurance Fund -Similar to the FDIC |
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business that protect their clients agianst losses form specific ricks
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insurance companies
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managed investment pools to provide retirement income from members
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pension funds
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Investment company that pools investor money and invests in large numbers of diversified securities
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mutual fund
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Buy and sell securities for clients and provide other services
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brokerage firm
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Underwrites new issues of securities for corporations, states and municipalities needed to raise money in capital markets
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investment bank
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Businesses that offer short-term loans at substantially higher interest rates than banks
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finance companies
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electronic funds transfer
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EFT
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automated teller machines
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ATM
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automated clearinghouses
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ACHs
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banking at anywhere/anytime
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online banking
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