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chapter 24
| Term | Definition |
|---|---|
| Coin | Metallic form of money such as pennies, nickels, and dimes |
| Currency | Both coins and paper money |
| Commercial bank | A financial institution that offers full banking services to individuals and businesses |
| Savings and loan association | Financial institutions that traditionally loaned money to people buying homes |
| Credit union | Nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services |
| Central bank | An institution that lends money to other banks;also, the place where the government does its banking business |
| Federal open market committee | The most powerful committee of the fed, because it makes the decisions that affect the economy as a whole by manipulating the money supply |
| Monetary policy | Policy that involves changing the rate of growth of the money supply in circulation in order to affect the cost and availability of credit |
| Discount rate | The interest rate the fed charges on its loans |
| Reserve | A certain percentage of deposits that banks have to set aside as cash in their own vaults or as deposits in their federal reserve district bank |
| Open market operations | Purchase or sale of U.S. government bonds and treasury bills |
| Checking account | An account in which deposited money can be withdrawn at any time by writing a check |
| Saving account | An account in which customers receive interest based on how much money they have deposited |
| Certificate of deposit | Timed deposit that states the amount of the deposit, maturity, and rate of interest being paid |