The Financial Environment
The study of how individuals, institutions, and businesses acquire, spend and manage money and other financial resources.
What is Finance?
Physical or electronic asset accepted as payment for goods, services, and debts.
What is money?
Loan backed by real property in the form of buildings and houses.
What is a mortgage?
U.S. Central Bank that sets monetary policy and regulates banking system.
What is the Federal Reserve System (FED)?
Measures the output of goods and services in an economy.
What is Gross Domestic product(GDP)?
Locations or electronic forums that facilitate the flow of funds among investors, businesses, and governments.
What is financial markets?
Decentralized and unregulated digital money that uses cryptography to record, maintain, and secure electronic payments.
What is cryptocurrency?
Accepts deposits from individuals and then lend pooled deposits to businesses, governments, and individuals.
What is a depository institution?
Federal Government agency that facilitates the operation of the financial system and regulates the money supply.
What is Central Bank?
An increase in the price of goods or services that is not offset by an increase in quality.
What is inflation?
(1) Money has a time value, (2) Higher returns are expected for taking on more risk, (3) Diversification of investments can reduce risk, (4) Financial markets are efficient in pricing securities, (5) Manager and stockholder objectives may differ, and (6) Reputation matters.
What is the 6 principles of finance?
Short term debt obligations issued by the U.S. Federal government.
What is Treasury bills?
Provides financial protection to individuals and businesses for life, property, liability, and health uncertainties.
What is insurance companies?
Provides advice and general information on banking-related issues to the BOG.
What is the Federal Advisory Council?
Setting the level and structure of taxes to affect the economy.
What is tax policy?
Where debt securities with maturities of one year or more are issued and traded.
What is capital Markets?
Measures the rate of circulation of the money supply in the modern economy.
What is velocity of money?
Open-end investment companies that can issue an unlimited number of shares to its investors and use the pooled proceeds to purchase corporate and government securities.
What are mutual funds?
Formulated by the fed to regulate money supply growth.
What is Monetary policy?
Total debt owed by the government.
What is national debt?
Where money market securities, bonds, and mortgages are originated and traded.
What is debt securities Markets?
International Monetary System tied to the U.S. dollar or gold via fixed or pegged exchange rates.
What is Bretton Woods System?
The act provided for separation of commercial banking and investment banking activities in the United States.
What is Glass-Steagall Act of 1933?
1968 Act requiring clear explanation of consumer credit costs and prohibiting overly high priced credit transactions.
What is the consumer credit protection act?
Temporary increase in bank reserves from checks credited to the reserve accounts of depositing Banks but not yet debited to the reserve accounts of those banks from which checks were drawn.
What is Federal reserve float?