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45 Cards in this Set
- Front
- Back
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1st US Bank |
- 1790 to 1811 - first attempt |
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2nd US Bank |
- 1816 to 1836 - people feared the national government power |
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Why was the 2 US Bank created? |
In 1913 to end 'panics' or runs on the banks due to people getting scared and coming to retrieve their money |
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Where is the national federal reserve bank located? |
Washington, DC |
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How many regional federal reserve banks? Where's tennessee's? |
12; Atlanta |
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How many branch federal reserve banks? Where is tennessee's? |
25; nashville |
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Who runs the federal reserve?; how many of them are there? |
Board of governors; 7 |
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How many terms does the board of governors serve? |
14 and one is replaced every 2 years |
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Why is one board of governors replaced every 2 years? |
To keep 6 that know what is going on while introducing a new person that can help others who come along afterwards. |
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Can board of governors be reappointed? Why? |
No, can only serve once.; so members don't have to make decisions that will keep a higher up happier so they can be reappointed. |
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Can board of governors be fired for their decisions? |
No because they are specially require different to make only decisions that will aid the economy, not based on others opinions. |
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How are board of governors appointed? |
Nominated By the president; approved by senate |
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Who nominates and approves chairman of the board ? What is term? |
President; senate approves; 4 year term, no limits of terms |
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What does the monetary policy do? |
(Federal reserve)Manages the money supply to influence interest rates and availability of credit. Overall promotes price stability Money > bank = less interest and vice versa |
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What's the tools of the monetary policy? |
- Buy and sell securities - lend money to banks |
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What does the fiscal policy do? |
(The executive and legislative Branch) funds the government operations and services, manage economic growth |
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What's the tools of the fiscal policy? |
Spending, taxing, borrowing |
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What is the banks product? |
Money |
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What is the price of a loan? |
Interest rates |
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What is the cost of a loan? |
Interest |
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Principal def. |
The amount of money borrowed. |
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Equity def. |
The current market value of a home, minus the outstanding mortgage amount. |
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Functions of the Fed |
- Governments bank - check clearing - issue paper currency - holding reserves |
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Loose money def. |
Credit is inexpensive and people are borrowing and spending money. |
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Tight money def. |
Credit is expensive and people borrow and spend less money. |
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What happens when interest is down? Up? |
Money supply decreases; money supply increases |
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Fractional reserve requirement def. |
The percent of money a bank must keep on band |
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If the Fed increase the reserve requirement what happens to the amount of money they have to loan out? Result of interest rates? |
Money availability goes down.; interest rates increase |
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If the Fed decrease the reserve requirement. What happens to what they have to loan out? Interests rates? |
Money supply increases; interest decreases. |
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Discount rate def. |
The rate of interest charged by the Fed for a loan to a member bank. |
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The discount rate is high, what is price of loan ? Discount rate is low, price of loan? |
Increase; decrease |
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Open market operations |
The buying/selling of US securities |
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If the Fed buys secures from member banks, what happens to the money supply? Price of loan? |
Increases; decrease |
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If the Fed sells securities to members banks, what happens to the money supply? Price of a loan? |
Decrease; increase |
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Federal open market committee has how many members? |
12 members |
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How many board of governors of the FOMC? |
7; 5 presidents of federal reserve banks (New York region always has a member on the FOMC) |
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All money is not? |
Currency |
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All currency is? |
Money |
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Money's purpose? (MSM) |
- medium of exchange - a store of value - measure of value |
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Types of Money (CIDS) |
- checks - debit cards - savings accounts - investments |
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Types of currency? |
- Bills - coins - treasury notes |
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Is a credit card money or currency? |
NEITHER, it is a short term loan from. Credit card company |
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What are deferred payments, but not a medium of exchange? |
Credit cards. You get goods now and pay later. |
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Who pays when you use a credit card? |
The credit card company, then you pay the bill they send. |
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Prime rates def. |
The rate of interest a banker charges on short term loans to the best customer. |
