Lesson 6.01 Try It 1

Vocabulary

Practice the vocabulary from the lesson.

 

Board of Governors

A group of seven members, operating in Washington, DC, appointed by the President and confirmed by the Senate to control the Federal Reserve System.

 

Central Bank

The main monetary authority of a country.

 

The Federal Reserve System

Also knowns as "The Fed", this is the central bank for the United States.

 

Check Clearing

One of the functions of the Federal Reserve. The system of moving the funds of a person writing a check to the person receiving the check.

 

Depository Institution

Any institution that accepts deposits and loans money to the public, which includes commercial banks, savings and loan associations, and credit unions.

 

Discount Rate

The rate at which an eligible depository institution may borrow money from the Federal Reserve Bank.

 

Excess Reserves

The amount of funds held by an institution in excess of required reserves.

 

Federal Funds Rate

The interest rate that depository institutions charge one another for an overnight loan.