Money and the Fed Review Econ

Run the bank

sudden rush by depositors to withdraw all deposited funds generally in anticipation of bank failure or closure.

Silver certificate

paper currency that can redeemed for actual silver.

Federal Reserve

the central bank of the United States

National Banking System

a commercial bank carters by the national banking system

Fiat money

Anything that is declared money by government decree.

Greenbacks

currencies printed by the Confederacy and the Union printed during the Civil War.

Money

medium of exchange, measure of value, and store of value

State bank

a bank that receives its charter from the state in which it operates.

Credit union

a nonprofit service cooperative that is owned by, and operated for the benefits of its members

Now Accounts

an interest-earning bank account that combines the features of checking and savings, allowing holders to write drafts (checks) while earning interest.

Commodity money

money that has an alternative use as an economic good; gunpowder, flour, corn, etc

Liabilities

a financial obligation or debt owed by an individual or business to another party, requiring a future transfer of assets, goods, or services.

Assets

Demand for money to hold wealth

M1

represents the transaction demand for money or the role of money as a medium of exchange

List the characteristics of money.

1. Money must be portable

2. Money must be reasonably durable

3. Money should be easily divisible into smaller units

4. Money must be available but only in limited supply. 

Why was the FDIC established?

because of the Banking Act of 1933

When was the Federal Reserve established?

1913.

In the short run, an increase in the money supply results in ____ interest rates.

lower

What is the function of the Federal Open Market Committee?

to decide monetary policy.