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12 ECON Vocab 15
study material for Economics Vocab CH 15 - Ponder
| Term | Definition |
|---|---|
| time deposit | interest-bearing deposit that cannot be withdrawn without prior notice |
| net worth | excess of assets over liabilities |
| Ml | components of the money supply that most closely match money's role as a medium of exchange |
| member bank | commercial banks that are members of, and hold stock in, the Fed |
| prime rate | best or lowest interest rate that commercial bankers charge their customers |
| reserve requirement | rule stating that a percentage of every deposit must be set aside as legal reserves |
| tight money policy | Fed plan to restrict the money supply and allow interest rates to rise |
| savings account | interest-bearing deposit that can be withdrawn without prior notice |
| monetary policy | Fed's plan for expanding or contracting the money supply |
| assets | properties, possessions, and claims on others |
| legal reserves | coins and currency that depository institutions hold in their vaults plus deposits they have placed in Fed district banks |
| balance sheet | condensed statement showing all assets and liabilities |
| member bank reserve | deposit a member bank keeps at the Fed |
| liabilities | debts and obligations to others |
| discount rate | interest rate the Fed charges on loans to financial institutions |
| Regulation Z | law giving the Fed authority to extend truth-in-lending disclosures to people borrowing from corporations, retail stores, automobile dealers, and lending institutions |
| real rate of interest | market rate of interest minus the rate of inflation |
| easy money policy | Fed plan to allow the money supply to grow and interest rates to fall |
| bank holding company | corporation that owns one or more banks |
| liquidity | potential to be converted into cash very quickly |