| A | B |
|---|
| banks that belong to the Federal Reserve System | Members bank. |
| a form of corporatiojn that owns one or more banks. | bank holding company |
| requires sellers to make acomplete and accurate disclosures to people who buy on credit. | truth-in-lending laws |
| truth-in-lending disclosures are extended to millions of individuals by corporations, retail stores, automobile dealers, etc | Regulation Z |
| The paper component of the money supply | currency |
| minimum deposits left with a stock broker to be used as down payuments to buy other securities | margin requirements |
| Chairman of the Federal Reserve System | Alan Greenspan |
| involves controlling the expansion and/or contraction of the money supply to influence the cost oand availability of credit. to influence | Monetary policy |
| requires banks and other depository institutions to keep only a fraction of their deposits. | Fractional monetary reserve system |
| The formula used to compute the amount of reserves an institution must have | reserve requirement |
| coins, currency, and depostis used to fulfill the reserve requirement. | Legal reserve |
| The portion of the legal reserves the member banks keep at the Fed | member bank reserves (MBRs) |
| The debts and obligations to others | liabilities |
| the properties, possessions, and claims on others | assets |
| condensed statement all liabilities and assets | balance sheet |
| The excess if assets over liabilities, which is a measure of the value of a business | net worth |
| The cash and currency not needed to fulfill the reserve requirement | excess reserve. |
| Something that can be quickly converted to cash | liquidity |
| a receipt showing that an investor has made an interest-bearing loan to a bank | certificate of deposit |
| Interest bearing deposits that cannot be withdrawn by check | savings account and time deposits. |
| The Fed allows the money supply tp grow and interest rates to fall, which normally stimulates the economy | easy money policy |
| The Fed restricts the growth of the money supply, which drives the interest rates up. | tight money supply |
| What happens when interest rates are high? | consumers and businesses borrow and spend less, slows the economy. |
| What is the first tool of monetary policy | Reserve requirement |
| what accounts can the Fed change the requirements | checking, time and saving accounts |
| What happens if the Fed lowers the reserve? | More money could be loaned, economy expands. |
| The buying and selling of government securities in financial markets | open market operations |
| What does the open market operation do? | affects the amount of excess reserves in the banking system, ability of banks to lend. |
| Fed's New York district bank where the buying ansd selling takes place | trading desk |
| the interest the Fed charges on loans to financial institutions | discount rate |
| teller's window st the Fed to borrow member bank reserves | Discount window |
| The property or other security used to guarantee payment of a loan. | collateral |
| The use of persuasion such as announcements and testimony before Congress | Moral suasion |
| Rules pertaining to loans for specific commodities or purposes | selective credit controls |
| the best or lowest interest rate commercial bankers charge their customers | prime rate |
| In the long run, changes in the supply of money affect the general level of prices. | quantity theory of money |
| Create enough extra money to offset the deficit spending. | monetize the debt |
| Spending more money than collecting revenue | deficit spending |
| What could happen if you monetize the debt | inflation |
| Represents the transactional components of the money supply | M1 |
| Those medians that most represent money's role as a medium of exhange | M1 |
| traveler's checks, coins, currency, demand deposits, NOW accounts | M1 |
| M1, small denomination time deposits, savings deposits, and money market funds | M2 |
| A bank that is in jeopardy put on FDIC confidential list | problem bank list |
| When the FDIC cannot find a buyer for a failed bank | `declare the bank insolvent and close the doors. |
| A person or institution to whom money is owed | creditor |
| banks with more than 25% of their loans in agriculture | agricultural banks |
| Banks with more than 25% of their loans in gas, oil and other energy areas | Energy banks |
| New capital requirement | Cushion to absorb loan losses. |
| Gathers and analyzes statistics on death, sickness, injurydisability, unemployment, etc | Actuary |
