Chapter 12: Money and Financial Institutions

Modern society

________ uses coins, currency, checks, and debit cards as part of the monetary system.

Reserves

________ are funds set aside for emergencies, such as a rush of withdrawals.

Financial institution

A(n) ________ is a firm that manages money.

Direct deposit

________ is the electronic transfer of a payment directly from the payers bank account to that of the party being paid.

Collateral

________ is property or goods pledged by a borrower to use as security against a loan if it is not repaid.

Credit unions

________ are not- for- profit banks set up by organizations for their customers to use.

Insurance companies

________ not only provide protection against problems such as fire and theft, but they also offer loans to businesses and consumers.

Mortgage companies

________ provide loans specifically for buying a home or business.

Money Supply

Regulating the ________ The primary responsibility of the Federal Reserve is to determine the amount of money in circulation and either increase or decrease it.

Mortgage

A(n) ________ is an agreement in which a borrower gives a lender the right to take the property if the loan is not repaid.

standard of value

Money is a(n) ________ and a means of exchange or payment.

Goods

________ and services are directly exchanged using money.

Bank account

A(n) ________ is a record of the amount of money a customer has deposited into or withdrawn from a bank.

mortgage loans

Savings and loan associations are financial institutions that hold customers funds in interest- bearing accounts and invest mainly in ________.

Federal Reserve

Also known as "The Fed, "the ________ is the bankers bank.

Electronic funds

________ transfer (EFT) allows money to be transferred from one bank account to another through a network of computers.

Safe deposit box

A(n) ________ is a secure box in a banks vault used for the safe storage of a customers valuables.

Finance companies

________ offer short- term loans to businesses and consumers, but at much higher interest rates than banks charge.

bank account

The money put in a(n) ________ is called a deposit.

There are four main types of loans that banks offer to busi

nesses and individuals