Business Quizz/test Chapter 20
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what is the money supply?
the amount of money the federal reserve bank makes abvailable for people to buy goods and services.
what is M-1?
money that can be accessed quickly and easily
what is m-2?
money included in m-1 plus money thatt may take a little more time to obtain(savings account, mutual funds)
what is the reserve requirement?
a percentage of commercial banks checking and savings accounts that must be physically kept in the bank.
what are the open-market operations?
the buying and selling of u.s. govenment bonds by the fed with the goal of regulating the money supply.
what is the discount rate?
the interest rate that the fed charges for loans to member banks
what are nonbanks?
financial organizations that accept no deposits but offer many of the services provided by the regular banks
what is a commercial bank?
a profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans
what is demand deposit?
the technical name for a checking account; the money in a demand deposit can be withdrawn anytime on demand from depositor.
what is time deposit?
savings account/ the bank can require prior notice before the owner withdraws money from a time deposit.
what is a certificate of deposit(cd)?
a time deposit(savings)account that earns interest to be delivered at the end of the certificates maturity date.
what is the savings and loan association?
a financial institution that accepts both savings and cheking deposits and provides home mortgage loans.
what are credit unions?
nonprofit, member-owned financial cooperatives that offer the full variety of banking services to their members.
what are pension funds?
amounts of money put aside by corporations nonprofit organizations or unions to cover part of the financial needs of members when they retire.
what is the federal deposit insurance corporation(fdic)?
an independent agency of the u.s. government that insures bank depostis.
what is the savings association insurance fund(saif)?
the part of the fdic that insures holders of accounts in savings and loan associations
what is the electronic funds transfer (EFT) system?
a computarized system that electrinically performs financial transactions such as making purchases, paying bills, and receiving paychecks.
what is the electronic check conversion(ECC)?
an electronic funds transfer tool that converts a traditional paper check into an electronic transaction at the cash register and processes it through the federal reserves automated clearing house
what is a debit card?
an electronic funds transfer tool that serves the same function as checks: it withdraws funds from a checking account
what is a smart card?
an electronic funds transfer tool that is a combination credit card, debit card, phone card, drivers license card, and more
what is a letter of credit?
a promis by the bank to pay the seller a given amount if certain conditions are met.
what is bankers acceptance?
a promise that the bank will pay some specified amount at a particular time
what is the world bank?
the bank primarely responsible for financing economic development; also known as the international bank for reconstruction and development
what is the international monetary fund(IMF)?
organization that assists the smooth flow of money among nations.
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