Term
| What is a transaction account? |
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Definition
| it is an account that allows transactions to occur at any time and in any number. |
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Term
| What is a demand deposit? |
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Definition
| They are accounts that are payable on demand whenever the depositor chooses. |
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Term
| What is the most common form of a transaction account. |
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Definition
| Checking account is the most common form of a transaction account. |
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Term
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Definition
| They are deposits held for a specified time. |
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Term
| What do money market deposit accounts (mmdas) do? |
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Definition
| They offer a higher rate of interest then savings accounts, but they usually require a higher initial deposit to open an account. |
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Term
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Definition
| Interest is the price paid of the use of money. |
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Term
| What is the basic formual for calculating interest? |
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Definition
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Term
| What is compound interest? |
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Definition
| adding interest to the principal and paying interest on the new total. |
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Term
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Definition
| It means Annual Percentage Rate. |
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Term
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Definition
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Term
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Definition
| Money includes checks, ledger transfers, and even credit. |
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Term
| What is the greatest factor in the flow of deposits? Why do economist track and analyze so much data? |
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Definition
| The activity in the economy at large. They track and analyze because they need to get information. |
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Term
| How do reserve requirements impact the flow of money? |
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Definition
| If reserve requirements are high then the money supply retracts if reserve requirements are low then the money supply is the opposite. |
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Term
| What are some limitations of reserve requirements? |
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Definition
• Reserve requirements do not change that often.
• Reserve requirements only apply to the M1 money supply.
• The Fed does not control other forms of commerce. |
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Term
| What are the two ways that the fed can influence the money supply and the flow and of deposits? |
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Definition
• The fed can put more money in the economy by buying securities or creating new money
• The fed can effectively take money out of the economy if the feel it needs to slow the economy they do this by selling treasury securities, the money they earn from the sell of treasury securities. |
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Term
| How does the Federal Reserve influence the flow of deposits? |
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Definition
| The Fed influences the flow of deposits by taking money out the economy. |
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Term
| What are banks required by state and Federal governments to provide? |
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Definition
| They are required to provide this documentation to customers so that questions about policies and procedures related to their accounts have clear answers. |
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Term
| What is Reference to Governing Documents? |
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Definition
| They are account holders agree to abide by the rules as set forth in the rest of the governing documents. |
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Term
| What are signature policies? |
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Definition
| Signature policies are when banks keep a signature card on a file with the signature of all parties to an account, whether it is held solely or jointly with other persons. |
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Term
| What is opening and closing accounts? |
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Definition
| When opening and closing accounts policies governing opening requirements may include a specified minimum opening deposits. The bank also reserves the right to close to an account its discretion. |
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