Matching: Match the Key terms in Column "A" with the definitions in Column "B" by writing the block letter of yourchoice from Column "B" in the space provided under "A" and match the definitions in column "B" with the meanings or examples or facts in column "C"by writing the lower
letter case of your choice in the space provided under column "B". I need only questions #1,3,5,7,9,11,13,15,17,19, 21, 23, 25, 27, 29, & 31. Thank you.
Chapter 12. Money, Banking & The Financial System: Pre- Class & In-Class Activities Packet Name/I.D. Number: Section: Date: Part 2. Matching: Match the Key terms in Column "A" with the definitions in Column "B" by writing the block letter of your choice from Column "B" in the space provided under "A" and match the definitions in column "B" with the meanings or examples or facts in column "C" by writing the lower letter case of your choice in the space provided under column "B". Column "A" Column "B" Column "C" 1. Money A. An interest-earning account at a mutual fund company, for which a letter of a. Narrow definition of the money supply that involves cash, 2. Barter your minimum balance is usually required and most of which offer limited travelers checks and checking deposits. check-writing privileges. Only retail MMMFs are part of M2. b. Fiat or Paper money in circulation. 3. Medium of Exchange B. In a barter economy, a requirement, which must be met before a trade can be made. It specifies that a trader must find another trader who at the same C. United States notes & national bank notes issued by the Fed. 4. Unit of Account time is willing to trade what the first trader wants & wants what the first trader d. Also known as "Demand Deposits" or "Checking Accounts" has. e. Broader definition of the money supply that includes M1 and 5. Store of Value C. Deposits on which checks can be written. Time, Saving and other deposits. 6. Double Coincidence D. Exchanging goods and services for other goods and services without the f. A cross between saving and checking deposit that typically of Wants use of money. pays a higher interest rate than a savings account, and which E. A banking arrangement that allows banks to hold reserves equal to only a provides the account holder with limited check-writing ability. 7. M1 fraction of their deposit liabilities. 9. A type of fixed income fund that invests in debt securities bonds) characterized by their short maturities & minimal 8. Currency F. Currency held outside banks + checkable deposits + Travelers Checks. credit risk. 9. Federal Reserve G. The ability of an item to hold value over time; a function of money. h. It is a banking system in which only a fraction of bank H. An interest-eaming account at a commercial bank or thrift institution. deposits are backed by actual cash on hand as determined Notes Normally, checks cannot be written on savings deposits, and the funds in a by the Fed. 10. Checkable Deposits savings deposit can be withdrawn at any time without a penalty payment. i. An account at a bank that helps to save & yields interest I. Anything that is generally acceptable in exchange for goods and services; a payment to depositors 11. M2 function of money. j. An account at a bank to keep the money for a specified period J. An interest-earning deposit with a specified maturity date. Time deposits of time in exchange for higher deposit rate payment. 12. Savings Deposit are subject to penalties for early withdrawal, that is, withdrawal before the Example: Certificate of Deposits (CDs). K. 13. Time Deposit maturity date. Small-denomination time deposits are less than $100,000. Exchanging goods for other goods before the emergence K. Coins and Paper Money. of money. 14. Money Market Deposit _ L. An interest-earning account at a bank or thrift institution, for which a 1. One of the functions of money as a means to conduct minimum balance is usually required & most of which offer limited check- transaction. Account(MMDA) writing privileges. m. One of the functions of money as a means to compare and contrast the value of different commodities 15. Money Market Mutual M. Paper money issued by the Federal Reserve. N. Any good that is widely accepted for purposes of exchange and the n. One of the functions of money as a means to preserve Fund (MMMF) repayment of debt. purchasing power for the future. O. M1 + savings deposits (including money market deposit accounts) + O. Any thing used as medium of exchange. 16. Fractional Reserve small-denomination time deposits + money market mutual funds (retail). P. A pre conditions for barter to happen, that is, reciprocity or simultaneous interest for the goods that the two parties have Banking P. A common measure in which relative values are expressed; a function of money. to offer.Chapter 12. Money, Banking & The Financial System: Pre- Class & In-Class Activities Packet Name/I.D. Number: Section: Date: Part 2. Matching: Match the Key terms in Column "A" with the definitions in Column "B" by writing the block letter of your choice from Column "B" in the space provided under "A" and match the definitions in column "B" with the meanings or examples or facts in column "C" by writing the lower letter case of your choice in the space provided under column "B". Column "A" Column "B" Column "C" 17. Federal Reserve Q. Funds are loaned and borrowed through a financial q. Amount of reserves kept by banks over & above what is System (The Fed) intermediary. required by the Fed. R. Anything of value that is owned or that one has claim to. r. A method of financing done by borrowing directly from 18. Reserves S. A financial intermediary transfers funds from those who creditors without the involvement of banks and other financial want to lend funds to those who want to borrow them. intermediaries. 19. Required Reserve T. Anything that is owed to someone else. S. Monetary or non-monetary properties owned by banks. Ratio (r) U. Relates to an economic agent on one side of a transaction t. Debt obligation owed to others. having information that an agent on the other side of the U. When debt owed is greater than properties owned. 20. Required Reserves transaction does not have. V. A method of financing that involves banks and other financial 21. Reserve Requirement V. A condition in which one's liabilities are greater than one's companies that go between the two sides assets. W. A bank or other financial company that go between the 22. Excess Reserves W. A phenomenon that occurs when the parties on one side of borrower and the lender so as to mobilize funds from the the market, who have information not known to others, self- savers to the borrowers. 23. Direct Finance select in a way that adversely affects the parties on the other X. Uneven or unequal access to Information side of the market. 24. Indirect Finance X. The central bank of the United States. y. The situation in which individuals with good information can take advantage of others who do not have the same 25. Financial - Y. The sum of bank deposits at the Fed and vault cash information. Intermediary Z. Any reserves held beyond the required amount; the Z. The situation in which one of the parties to a deal changes difference between (total) reserves and required reserves. his or her behavior unknown to the other party that may have 26. Asymmetric AA. Borrowers and lenders come together in a market setting, negative impact on the other party. Information such as in the bond market. aa. A financial statement that shows the net worth a bank. 27. Adverse Selection BB. A condition that exists when one party to a transaction bb. Money kept by banks in their vaults and at the Fed either to changes his or her behavior in a way that is hidden from and meet their customers need or to meet the requirement of the 28. Moral Hazard costly to the other party. Fed. CC. A record of the assets and liabilities of a bank. CC. A percentage that is applicable to the Checking Deposit that 29. Balance Sheet - DD. The Fed rule that specifies the amount of reserves a bank must be kept by banks to meet reserve requirement. 30. Asset must hold to back up deposits dd. The institution in charge of conducting monetary policy In the EE. A percentage of each dollar deposited that must be held in U.S., it is also known as "The Fed" (in Economics). 31. Liability reserve form (specifically, as bank deposits at the Fed or vault ee. The policy of the Fed that requires banks to keep a fraction of cash) their checking deposit to meet the needs of their customers. 32. Insolvency FF. The minimum dollar amount of reserves that a bank must ff. The amount of money that must be kept by banks to meet hold against its checkable deposits, as mandated by the Fed. reserve requirements mandated by the Fed
