Macroeconomics Mcconnell Brue 17 Chapter 12

Front 1

Unit of account

Back 1

A standard unit in which prices can be stated and the value of goods and services can be compared; one of the three functions of money

Front 2

Store of value

Back 2

The asset set aside for future use; one of the three functions of money

Front 3

M1

Back 3

Currency in the hands of the public and the checkable deposits of commercial banks and thrift institutions.

Front 4

M2

Back 4

M1 plus non-checkable savings accounts (including money market deposit accounts), small time deposits (deposits of less than $100,000), and individual money market mutual fund balances.

Front 5

Federal Reserve Notes

Back 5

Paper money issued by the Federal Reserve Banks

Front 6

Checkable deposits

Back 6

Any deposit in a commercial bank or thrift institution against which a check may be written

Front 7

Commercial banks

Back 7

A firm that engages in the business of banking (accepts deposits, offers checking accounts, and makes loans)

Front 8

Savings account

Back 8

A deposit in a commercial bank or thrift institution on which interest payments are received; generally used for saving rather than daily transactions; a component of the M2 money supply

Front 9

Money market deposit account (MMDA)

Back 9

Bank and thrift provided interest bearing accounts that contain a variety of short-term securities; such accounts have minimum balance requirements and limits on the frequency of withdrawals.

Front 10

Money market mutual fund (MMMF)

Back 10

Interest-bearing accounts offered by investment companies, which pool depositors funds for the purchase of short-term securities. Depositors can write checks in minimum amounts or more against their accounts.

Front 11

Federal reserve system

Back 11

The U.S. central bank, consisting of the Board of Governors of the Federal Reserve and the 12 Federal Reserve Banks, which controls the lending activity of the nation's banks and thrifts and thus the money supply; commonly referred to as the "Fed"

Front 12

Board of Governors

Back 12

Seven member group that supervises and controls the money and banking system of the United States; the Board of Governors of the Federal Reserve System; the Federal Reserve Board.

Front 13

Federal reserve banks

Back 13

12 banks chartered by the U.S. government to control the money supply and perform other functions.

Front 14

Federal Open Market Committee (FOMC)

Back 14

12-member group that determines the purchase and sale policies of the Federal Reserve Banks in the market for U.S. government securities

Front 15

Thrift institutions

Back 15

A savings and loan association, mutual savings bank, or credit union.