AP Macro Unit 4 Vocab #2

Front

Demand Deposits

Back

Money in a checking account at a bank.

Front

Assets

Back

Anything tangible or intangible that is owned

Front

Required Reserves

Back

The percent that banks must hold by law

Front

Liability

Back

Anything that is owed

Front

Excess Reserves

Back

The amount that the bank can loan out

Front

Federal Funds Rate

Back

The interest rate banks charge each other for one-day reserve loans.

Front

Fractional Reserve Banking

Back

Banks hold a small portion of deposits for withdrawals and loan out the rest.

Front

Reserve Ratio

Back

Percent of deposits banks must hold in reserve.

Front

Open Market Operations

Back

When the FED buys or sells government bonds

Front

Discount Rate

Back

The interest rate that the FED charges commercial banks.