Unit 4 Money and Banking Vocabulary
Federal Reserve Bank
The system created as many as 12 regional banks throughout the country.
Federal Reserve Board
This has members that are appointed by the President of the U.S., and they supervise the Federal Reserve Banks.
National bank
A bank chartered, or licensed, by the federal government. It has the power to issue a national currency, manage the federal government's funds and monitor other banks throughout the country
Central bank
A bank that can lead to other banks in time of need
Bank Holding Company
A company that owns more than one bank
Short Term Loans
When each of the regional Federal Reserve Banks allowed member banks to borrow money to meet short-term demands. This helps prevent bank failures.
Gold standard
A monetary system in which paper money and coins had the value of certain amounts of gold. This set a definite value for the dollar.
Bank
An institution for receiving, keeping and leading money
Medium of exchange
Anything that is used to determine value during the exchange of goods and services
Money
Anything that serves as a medium of exchange, a unit of account, and a store of value
Member Banks
Banks that belong to the Fed. They store some of their cash reserves at the Federal Reserve Bank in their district.
Currency
Coins and paper bills used as money
Specie
Coins made of gold and silver
Commodity money
Consists of objects that have value in and of themselves and that are also used as money for example salt and precious metals
Reserves
Deposits that a bank keeps readily available as opposed to lending them out
Greenbacks
Issued in 1861, it was the first paper currency issued by the United States Treasury after the continental. They were offcially called demand notes.
Fiat money
Legal tender has value because a government has decreed that it is an acceptable means to pay debts
Bank runs
Widespread panics in which great numbers of people try to redeem their paper money at the same time. This causes many banks to fail.
Representative money
Makes use of objects that have value solely because the holder can exchange them for something else of value
Store of value
Money keeps its value if you decide to hold on to or store it instead of spending it
The Monetary Policy
The actions that the Fed. takes to influence the level of real GDP and the rate of inflation in the economy
Reserve Requirement
The amount of reserves that banks are required to keep on hand
Federal Reserve Notes
The currency we use in the U.S. today, created by the Federal Reserve Bank System
Barter
The direct exchange of one set of goods and services for another
Federal Funds Rate
The interest rate that banks charge each other for these loans
Unit of account
The money which provides a means for comparing the values of goods and services
Check clearing
The process by which banks record whose account gives up money and whose account receives money as a result of a customer writing a check
Discount Rate
The rate that the Fed. Reserve charges for these loans
Foreclosures
The seize of property from borrowers who are unable to repay their loans