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chapter 24
vocab
Term | Definition |
---|---|
coin | metallic form of money such as pennies, nickles, and dimes |
currency | both coins and papers money |
commercial bank | a financial institution that offers full banking services to individuals and business |
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 u.s. government bonds and treasury bills |
checking account | an account in which money can be withdrawn at any time by writing a check |
savings 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 |