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Published byPearl Webb Modified over 9 years ago
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Checking Unit What Is Money?
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Money Medium of exchange Measure of value Storing
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Types Currency/coin Checks Credit card Electronic transfer
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Checking Accounts/Demand Deposit Interest bearing checking account Non-interest bearing Standard Accounts – set monthly fee Special Accounts – college students – small # of checks written – no min. balance Who insures these accounts? For how much?
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Terms Passbook/checkbook Account Statement. Reconciliation-the process of finding the correct ending balance of a checking account. Trustee EFT/Debit Card/ATM Direct Deposit
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Terms Clearing a check/canceled check. –Can you always cash a check whenever you want? Stop payment order. ($10) Floating a check. Bounced check. Outstanding check. Safe deposit box.
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Federal Reserve Banks 12 The banker’s bank Federal Reserve Chairman:
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What They Do Acts as central bank – issues currency. Bank for U.S. Govt. - Processes tax refunds, transfer payments, etc. Examines books of financial institutions. Protects consumers – truth in lending law – free pamphlets and info. Regulates nations money supply.
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Monetary Policy Regulating the size of the money supply. Reserve Requirements: The % of deposits the institution must maintain in its vaults. A lower reserve requirement means banks have more $ available to make loans. Consumers have more $ to spend. Demand for goods go up. Discount-rate policy – Interest rate charged by Fed to member banks. Lower rate = more borrowing.
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