| A | B |
|---|
| barter | exchange of goods or services; done prior to money |
| Federal Reserve System | created in 1913 to control the nation's economy |
| President & Congress | appoint and approve Board of Directors |
| selling securities (treasury bills) | most common tool used by the Fed to control the economy |
| regulate money supply | job of the Fed |
| central bank | an institution that lends money to other banks also the place where the govt does its banking |
| Federal Open Market Committee | the most powerful committee of the Fed which makes decision that affect the economy as a whole by manilpulating the money supply |
| manipulate | to make changes to a something for a desired effect |
| reserve requirement | the percentage of a deposit the banks have to set aside as cash in their own vaults or as deposis in their Federal Reserve district bank |
| Certificate of deposit (CD) | a timed deposit that states the amount of the deposit maturity and rate of interest being paid |
| money market account | a type of savings account that pays interest but also allows customers to write checks against the account |
| savings account | an account that pays interest on deposits but allows customer to withdraw money at any time |
| checking account | an account where money can be withdrawn at any time by writing a check, ATM and EFT (generally low risk, low reward and high accessibility) |
| FDIC | insures all personal savings accounts up to $250,000 per person per institution |
| credit unions | non profit cooperative financial institutions |
| Savings and Loans | lend people money for homes and cars; center of a financial crisis; eventually brought under the FDIC |
| commercial banks | offer full financial services to consumer and businesses |
| making loans | way that banks make money |
| interest | the amount of money charged to borrow money; calculated as a percent |
| purpose | term of loan that states what you need the money for ( house, car) |
| length of time | term of loan which might be 5 years for a car or 30 years for a house |
| rate of interest | term of loan that determines how much you will pay the lender in order to borrow the money |
| amount | term of the loan that is how much you want to borrow |
| routing number | the number on the bottom left hand side of check which tells which bank |
| Panic of 1907 | The event that caused the creation of the Federal Reserve system |
| 12 | how many districts were created by the Fed |
| principal | original sum of money borrowed in a loan |
| income and expenses | two parts of a budget |
| income | money that you earn |
| expenses | ways that you spend money |
| surplus | more income than expenses |
| defecit | more expenses than income |
| budget goal | keep a positive balance |
| balance | the amount of money you have left over after you subtract your expenses from you income |
| APR | annual cost of credit expressed as a percentage of the amount borrowed |
| collateral | property that a borrower pledges as security for a loan |
| loan | money lent at interest |
| borrower | the recipient of a loan |
| lender | person or institution that gives some one money temporarity for a fee |
| interest | the fee charged for borrowing money |
| credit rating | estimate of a borrower's ability to repay a loan |
| debit card | electronically subtracts the price of a purchase from your bank account |
| checks | often used to pay one time payments or things that you have to mail. |
| credit card | allows you to make a purchase now and then pay it off at the end of the month along with your other puchases that you made that month |
| The Fed | the nickname for the govt entity that controls the monetary supply |
| discount rate | the interest rate that the Fed charges the member banks |
| ATM | automated machines that dispense money; important to count it as a debit in your check register |
| EFT | electronic transfer of funds directly from your bank account; often used for fixed expenses that are deducted monthly, you would need to know you routing and account number to set it up |
| electronic funds transfer | EFT stands for |
| annual percentage rate | APR |
| things you want to be high | credit score & interest rate if you are "lending" your money, employment rate |
| things you want to be low | APR, interest rate if you are borrowing, unemployment rate |
| generic | s a type of consumer product that lacks a widely recognized name or logo because it typically isn't advertised; generally cheaper than "name brands" ex. Equate, best value, SE Grocers |
