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SAVINGS AND LOAN ASSOCIATION: A depository institution chartered by the Federal Home Loan Bank that was established to assist home owners with low-cost mortgage loans using savings deposits. However, S&Ls have expanded their activities and now provide most of the services of traditional banks, including checkable deposits.
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Lesson 18: Banking | Unit 3: Reserve Banking
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Page: 16 of 24
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Topic:
Goldsmith Reserves
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Knights make gold deposits, others withdraw gold, merchants seek investment loans, and others repay loans. Fred must keep sufficient gold to satisfy any withdrawal. Required reserves: - Fred concludes that he needs no more than 10 pounds of gold to back each 100 pounds of gold deposits.
- He doesn't need to keep 100% of the deposits in reserves.
Fred has discovered modern fractional-reserve banking. Excess Reserves: - Fred uses the other 90% for the loans which earn interest and make his business a profitable one.
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ALLOCATIVE EFFICIENCY Obtaining the most consumer satisfaction from available resources. In other words, resources are allocated in such a way that consumer satisfaction is at its highest possible level. This is also termed either efficiency or economic efficiency.
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BROWN PRAGMATOX [What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads trying to buy either yellow cotton balls or a set of steel-belted radial snow tires. Be on the lookout for telephone calls from long-lost relatives. Your Complete Scope
This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"The road to success is always under construction. " -- Lily Tomlin, Actress
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AAO Authorized Acquisition Objective
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