Buisness Flashcards
Federal Reserve System is the central bank of United States
-Divided into 12 districts-Responsible for monetary system.
Core functions of the Federal Reserve:
-Establish monetary policy-Supervise and regulate financial institutions-Maintain stability of the nation's financial system-Provide financial services
Federal Deposit Insurance Corporation (FDIC)
Supervise and regulate financial institutions to ensure soundness of country's banking system
Depository Institutions
is a financial institution that accepts money from customers and deposits it into the customer's account.
checking account
is a bank account that allows the account owner to make deposits, write checks, and withdraw money
savings account
is a bank account used by depositors to accumulate money for future use
check
is a written order for the bank to pay a specific amount to the person or organization to which the check is written
investment bank
is a financial institution that provides services for businesses
Finance company
is a financial institution that makes money by issuing loans; loan company
nondepository institutions
is a financial institution that does not accept deposits
money
is anything of value that is accepted in return for goods or services; currency
banknote
is a document guaranteeing payment of a specific amount of money; payer named on document
security
is a financial investment issued by a corporation, government, or other organization
store of value
Money can be saved and used at a later date
stable
Maintain its value over time
divisible
Divide money into smaller units
durable
Made of a strong and lasting material
monetary system
is the mechanism a nation uses to provide and manage money for itself
monetary policy
is action taken to manage supply of money and interest rates
debit card
allows customers to pay for purchases directly from their checking account
What are the three functions of money?
The three functions of money are medium of exchange, unit of value, and store of value.
Why are laws and regulations necessary regarding financial exchange?
Laws and regulations are necessary to help facilitate financial exchanges and protect buyers and sellers from fraud and other illegal behavior.
Financial Institution
is any organization that provides services related to money
deposit
money placed into an account
Credit Union
is a nonprofit financial institution that is privately owned and provides banking services for its members
savings and loan institution
is a financial institution that offers savings and loan services
credit card
Is a plastic card that allows the holder to make credit purchases up to an authorized amount
Electronic funds transfer (EFT)
is a transfer of money from one bank account to another
Financial Exchange
is the process of transferring money from one individual or organization to another
portable
People must be able to carry money
recognized
Authentic money immediately recognizable
Unit of value
Money is a common measure of the worth or price of a good or service
medium of exchange
Money is used in exchange for goods and services needed by individuals, businesses, and governments
Tresuary bill
is a security that matures in a year or less
Tresuary note
is a security that pays interest over terms ranging from two to ten years
Government Bond
is a security that pays interest over terms of ten to thirty years
securities firms
is a financial institution that is involved in trading securities in financial markets
Line of credit
is a prearranged amount of credit that is available for a business to use as needed
letter of credit
Is a document guaranteeing that a buyer will pay the seller the agreed-upon amount and within the time specified