Macroeconomics McConnell Brue Flynn Chapter 14-15 – Flashcards

30 test answers

Unlock all answers in this set

Unlock answers 30
question
A system in which commercial banks and thrift institutions hold less than 100 percent of their checkable deposit liabilities as reserves of currency held in bank vaults or as deposits at the central bank
answer
Fractional reserve banking system
question
A statement of the assets, liabilities, and net worth of a firm or individual at some given time
answer
balance sheet
question
Currency a bank has on hand in its vault and cash drawers
answer
vault cash
question
The fraction of checkable deposits that each commercial bank or thrift institutions must hold as reserves at its local Federal Reserve Bank or in its own bank vault also called reserve requirement
answer
reserve ratio
question
Any item sellers generally accept and buyers generally use to pay fr a good or service money a convient means of exchanging goods and services without angaging in barter
answer
Medium of exchange
Unlock the answer
question
A standard unit in which prices can be stated and the value of goods and services can be compared one of the 3 functions of money
answer
unit of account
Unlock the answer
question
an asset set aside for future use one of the 3 functions of money
answer
store of value
Unlock the answer
question
the degree to which an asset can be converted quickly into cash with little or no oss of purchasing power money is said to be perfectly liquid whereas other assets have lesser degrees of liquidity
answer
liquidity
Unlock the answer
question
The most narrowly defined money supply, equal to currency in the hands of the public and the checkable deposits of commercial banks and thrift institutions
answer
M1
Unlock the answer
question
more broadly defined money supply, equal to M1 plus non checkable savings accounts (including money market deposit accounts) small time deposits (deposits less than 100K) and individual money smart mutual fund balances
answer
M2
Unlock the answer
question
paper money issued by the Federal Reserve banks
answer
Federal Reserve Notes
Unlock the answer
question
Bills or coins for which the amount printed on the currency bears no relationship to the value of the paper or metal embodied within it for currency still circulating, money for which the face value exceeds the commodity value (intrinsic)
answer
Token Money
Unlock the answer
question
any deposit in a commercial bank or thrift institution against which a check may be written
answer
Checkable deposits
Unlock the answer
question
A firm that engages in the business of banking accepts deposits, offers checking accounts, and makes loans
answer
Commercial banks
Unlock the answer
question
a savings and lean association, mutual savings bank, or credit union
answer
Thrift institutions
Unlock the answer
question
Financial assets that are not themselves a medium of exchange but that have extremely high liquidity and this can be readily converted into money Includes non checkable savings accounts, time deposits, and short term US government securities lys savings bonds
answer
Near monies
Unlock the answer
question
A deposit in a commercial bank or thrift institutions on which interest payments are received generally used for saving rather than daily transactions component of the M2 money supply
answer
Savings account
Unlock the answer
question
MMDAs, Interest bearing accounts offered by commercial banks and thrift institutions that invest deposited funds into a variety of short term securities Depositors mat write checks against their balances, but there are minimum glance requirements as well as limits on the frequency of check writing and withdrawals
answer
Money Market Deposit Account
Unlock the answer
question
an interest earning deposit in a commercial bank or thrift institution that the depositor can withdrawal without penalty after the end of a specified period
answer
Time deposits
Unlock the answer
question
mutual funds that invest in short term securities depositors can write checks in minimum amounts or more against their accounts
answer
Money market mutual fund
Unlock the answer
question
any form of currency that by law must be accepted by creditors (lenders) for the settlement of a financial debt a nations official currency is legal tender within its own borers
answer
legal tender
Unlock the answer
question
US 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 nations banks and thrifts, and thus the money supply Referred to as the Fed
answer
Federal Reserve System
Unlock the answer
question
The 7 member group that supervises and controls the money and banking system of the US The Federal Reserve Board
answer
Board of Governors
Unlock the answer
question
The 12 member group within the Federal Reserve System that decides US Monetary policy and how it is executed through open market operations( in which fed buys and sells Us government securities to adjust the money supply)
answer
Federal Open Market Committee
Unlock the answer
question
Bonds that represent claims to all or part of the months mortgage payments from the pools of mortgage loans made by lenders to borrowers to help them purchase residential property
answer
Mortgage backed securities
Unlock the answer
question
the process of aggregating many individual financial debts, such a mortgages or student loans, into a pool and then issuing new securities (typically bonds) backed by the pool the holders of the new securities are entitled to receive the debt payments made on the individual financial debts in the pool
answer
Securitization
Unlock the answer
question
TARP, 2008 federal government program that authorized the Us treasury to loan up to 700 billion to critical financial institutions and other US firms that were in extreme financial trouble and therefore a high risk of failure
answer
Troubled Asset Relief Program
Unlock the answer
question
the possibility that individuals or institutions will change their behavior as the result of a contract or agreement ex- a bank whose deposits are insured against losses may make risker loans and investments
answer
Moral hazard
Unlock the answer
question
The broad category of firms that provide financial products and serves to help households and businesses earn interest, receive dividends, obtain capital gains, insure against losses, and plan for retirement includes commercial banks, thrift institutions, insurance companies, mutual fund companies, pension funds, investment banks, and securities funs
answer
Financial Services industry
Unlock the answer
question
lat that gave authority to the Federal Reserve System to regulate all large financial institutions created an oversight council to look for growing risk to the financial system, assets of large financial institutions, provided federal regulatory oversight of asset backed securities, and created a financial consumer protection bureau within the Fed
answer
Wall Street Reform and Consumer Protection Act
Unlock the answer
Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New