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Business 101-15
Money & The Financial System
29
Business
Undergraduate 1
05/02/2013

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Term
Finance
Definition
the study of money; how it's made, how it's lost, and how it's managed
Term
Money
Definition
anythign generally accepted in exchange for goods and services
Term
Checking Account
Definition
money stored in an account at a bank or other financial institution that can be withdrawn without advance notice; also called a demand deposit
Term
Savings Account
Definition
accounts with funds that usually cannot be withdrawn without advance notice; also known as time deposits
Term
Money Market Accounts
Definition
accounts that offer higher interest rates than standard bank rates but with greater restrictions
Term
Certificates of Deposit (CDs)
Definition
savings accounts that guarantee a depositor a set interest rate over a specified interval as long as teh funds are not withdrawn before the end of the period--six months or one year, for example
Term
Credit Cards
Definition
means of access to preapproved lines of credit granted by a bank or finance company
Term
Debit Card
Definition
a card that looks like a credit card but works like a check; using it results in a direct, immediate, electronic payment fro mthe cardholder's checking account to a merchant or third party
Term
Federal Reserve Board
Definition
an independent agency of the federal government established in 1913 to regulate the nation's banking and financial industry
Term
Monetary Policy
Definition
means by which the Fed controls the amount of money avaiable in the economy
Term
Open Market Operations
Definition
decisions to buy or sell U.S. Treasury bills (short-term debt issued by the U.S. government) and other invesments in the open market
Term
Reserve Requirement
Definition
the percentage of deposits that banking institutions must hold in reserve
Term
Discount Rate
Definition
the rate of interest the Fed charges to loan money to any banking institution to meet reserve requirements
Term
Credit Controls
Definition
the authority to establish and enforce credit rules for financial institutions and some private investors
Term
Commercial Banks
Definition
the largest and oldest of all financial institutions, relying mainly on checking and savings accounts as sources of funds for loans to businesses and individuals
Term
Savings & Loan Associations (S&Ls)
Definition
financial institutions that primarily offer savings accounts and make long-term loans for residential mortgages; also called "thrifts"
Term
Credit Union
Definition
a financial institution owned and controlled by its depositors, who usually have a common employer, profession, trade, group, or religion
Term
Mutual Savings Banks
Definition
financial institutions that are similar to savings and loan associations but, like credit unions, are owned and operated by their depositors
Term
Federal Deposit Insurance Corporation (FDIC)
Definition
an insurance fund established in 1933 that insures individual bank accounts
Term
National Credit Union Association (NCUA)
Definition
an agency that regulates and charters credit unions and insures their deposits through its National Credit Union Insurance Fund
Term
Insurance Companies
Definition
businesses that protect their clients against financial losses from certain specified risks (death, accident, and theft, for example)
Term
Pension Funds
Definition
managed investment pools set aside by individuals, corporations, unions, and some nonprofit organizations to provide retirement income for members
Term
Mutual Fund
Definition
an investment company that pools individual investor dollars and invests them in large numbers of well-diversified securities
Term
Brokerage Firms
Definition
firms that buy and sell stocks, bonds, and other securities for their customers and provide other financial services
Term
Investment Banker
Definition
underwrites new issues of securities for corporations, states, and municipalities
Term
Finance Companies
Definition
businesses that offer short-term loans at substantially higher rates of interest than banks
Term
Electronic Funds Transfer (EFT)
Definition
amovement of funds means of an electronic terminal, telephone, computer, or magnetic tape
Term
Automatic Teller Machine (ATM)
Definition
the most familiar form of electronic banking, which dispenses cash, accepts deposits, and allows balance inquiries and cash transfers from one account to another
Term
Automated Clearinghouses (ACHs)
Definition
a system that permits payments such as deposits or withdrawals to be made to and from a bank account by magnetic computer tape
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