economics 11-1, 11-3, 15-1
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central bank
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bank that can lend to other banks in time of need
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federal reserve notes
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paper currency issued by the fed that eventually replaced all other types of federal currency
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run on the bank
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rush by depositors to withdraw funds from a bank before it failed
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bank holiday
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brief period during which every bank in the country was required to close
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commercial banks
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banks that catered to the interests of business and commerce
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mutual savings bank
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depositor-owned financial organization operated only for the benefit of its depositors
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NOW account
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a type of checking account that pays interest
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savings and loan association
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depository institution that invests the majority of its funds in home mortgages
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credit union
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nonprofit service cooperative that is owned by and operated for the benefit of its members
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share draft accounts
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interest-earning checking accounts to compete with NOW accounts
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deregulation
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removal or relaxation of government restrictions on business
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creditor
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person or institution to whom money is owed
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barter economy
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economy that relies on trade
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medium of exchange, measure of value, store of value
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three functions of money
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medium of exchange
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payment for goods/services accepted by all parties
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measure of value
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common denominator that expresses terms
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store of value
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property that allows purchasing power to be saved until needed
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commodity money
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money with alternative use as economic good
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fiat money
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money by government decree
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gold and silver
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what was used to back paper currency in early america?
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specie
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money in the form of coins
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monetary unit
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standard unit of currency
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portability, durability, divisibility, limited availability
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four characteristics money must have to have value
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bullion
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ingots or bars of precious metals
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board of governors
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what group sets general policies for federal reserve and member banks to follow, regulates certain operations of state-chartered member banks, and conducts some aspects of monetary policy?
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federal open market committee
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group that makes decisions about the growth of the money supply and the level of interest rates
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federal advisory council, consumer advisory council, thrift institutions advisory council
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three advisory committees that advise the board of governors
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clear checks, control size of money supply
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two key uses for the reserves that depository institutions must maintain
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bank holding company
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corporation that owns one or more banks and does not accept deposits or make loans
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clearing checks, consumer legislation, issuing currency, financial services to government
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four responsibilities of the fed
