RE Finance Unit 2: Money & the Monetary System Flashcards
Annual Percentage Rate (APR)
The effective interest rate.
Discount Rate
The rate that the Fed charges its members for funds borrowed on collateralized loans.
Discretionary Income
Earned funds left over for investment after allocations for necessities and reserves.
Disposable Personal Income
Total income less allocations for necessities; available for personal consumption.
FDIC
Federal Deposit Insurance Corporation; provides insurance of $250,000 per account and supervises the operations of banks that qualify for membership in the insurance program.
Federal Reserve System (Fed)
The nation’s economic manager, the Fed regulates its 12 member banks.
Federal Funds Rate
The rate the Fed recommends that member banks charge each other.
FHLB System
Federal Home Loan Bank System; serves the nation’s savings associations.
FOMC
Federal Open Market Committee; directs and regulates the Federal Reserve System’s open-market operations.
M1, M2, M3
Measurements of the United States money supply.
National Rate
The price charged by national advertisers for space and time in local advertising media.
Office of Thrift Supervision (OTS)
Essentially savings and loan associations that help members’ savings grow at a higher interest rate. More importantly, they are savings banks that specialize in real estate.
Open-Market Operations
The techniques employed by the Fed in buying and selling government securities that, in turn, control the amount of money in circulation.
Personal Income
A person’s gross income from all sources.
Prime Interest Rate
Interest rate charged by fiduciary institutions to their AAA-rated borrowers.
