Comm 1800 Flash Cards Chapter 20

Front 1

money

Back 1

anything that people generally accept as payment for goods and services.

Front 2

money- portability

Back 2

coins and paper money are easier to take around

Front 3

money- diversity

Back 3

different sized coins and bills can represent different values

Front 4

money-stability

Back 4

when everybody agrees on the value of coins

Front 5

money- uniqueness

Back 5

hard to counterfeit

Front 6

money supply

Back 6

the amount of money the federal reserve bank makes available for people to buy goods and services

Front 7

M-1

Back 7

money that can be accessed quickly and easily (coins and paper money, checks)

Front 8

M-2

Back 8

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

Front 9

M-3

Back 9

M -2 plus big deposits like institutional money market funds

Front 10

why does money supply need to be controlled?

Back 10

allows us to manage the prices of goods and services. the size of money supply also affects employment and economic growth or decline

Front 11

falling dollar value

Back 11

means that the amount of goods and services you can buy with a dollar decreases

Front 12

rising dollar value

Back 12

means the amount of goods and services you can buy with a dollar goes up

Front 13

reserve requirement

Back 13

percentage of commercial banks' checking and saving accounts that must be physically kept in the bank

Front 14

open market operations

Back 14

the buying and selling of us government bonds by the fed with the goal of regulating the money supply

Front 15

discount rate

Back 15

the interest rate that the fed charges for loans to member banks

Front 16

open market operations

Back 16

buying and selling of us government bonds by the fed with the goal of regulating the money supply

Front 17

land banks

Back 17

were established to lend money to farmers

Front 18

central bank

Back 18

bank at which other banks could keep their funds and borrow funds if needed

Front 19

federal reserve system

Back 19

organization that could lend money to banks

Front 20

commercial bank

Back 20

profit seeking organization that receives deposits from indviduals and corporations in the form of checking and saving accounts and then uses some of funds to make loans

Front 21

demand deposit

Back 21

the technical name for a checking account; the money in a demand deposit can be withdrawn anytime on demand from the depositor

Front 22

time deposit

Back 22

technical name for a savings account; the bank can require prior notice before the owners withdraws money from a time deposits

Front 23

certificate of deposit

Back 23

time deposit account that earns interest to be delivered t the end of the certificate's maturity date

Front 24

savings and loan association

Back 24

a financial institution that accepts both savings and checking deposits and provides home mortgage loans

Front 25

credit unions

Back 25

nonprofit, member owned financial cooperatives that offer the full variety of banking services to their members

Front 26

nonbanks

Back 26

financial organizations that accept no deposits but offer many of the services provided by regular banks (pension funds, insurance, commercial finance companies, consumer finance companies, and brokerage houses).

Front 27

pension funds

Back 27

amounts of money put aside by corporations, nonprofit organizations, or unions to cover part of the financial needs of members when they retire

Front 28

federal deposit insurance corporation

Back 28

an independent agency of the US government that insures bank deposits

Front 29

savings association insurance fund

Back 29

the part of the FDIC that insures holders of accounts in savings and loan associations

Front 30

electronic funds transfer system

Back 30

computerized system that electronically performs financial transactions such as making purchases,

Front 31

debit card

Back 31

an electronic funds transfer tool that serves the same function as checks: it withdraws funds from a checking account

Front 32

payroll debit cards

Back 32

efficient way for some firms to pay their workers and an alternative to cash for those who don't qualify for credit or debit card

Front 33

smart card

Back 33

an electronic funds transfer tool that is a combination credit card, debit card, phone card, driver's license card, and more

Front 34

direct deposit

Back 34

credit made directly to checking or savings account in place of a paycheck

Front 35

direct payment

Back 35

pre-authorized electronic payment

Front 36

letter of credit

Back 36

promise by the bank to pay the seller a given amount of certain conditions are met

Front 37

banker's acceptance

Back 37

promise that the bank will pay some specified amount at a particular time

Front 38

world bank

Back 38

bank primarily responsbile for financing economic development; also known as the international bank for reconstruction and development

Front 39

international monetary fund

Back 39

organization that assists the smooth flow of money among nations.