|
|
PARTNERSHIP: One of the three basic forms of business organization (the other two are corporation and proprietorship). A partnership is a business that's owned and operated more or less equally by two or more people. The owners and the business are legally considered one and the same. As such, each owner has unlimited liability, which means that an owner is held personally responsible for any and all of the business's debts, including those made by a partner.
Visit the GLOSS*arama
|
|
|
|
|
Lesson 19: Money Creation | Unit 3: Modern Banking
|
Page: 10 of 23
|
|
Topic:
Fractional-Reserve Magic
|
|
|
|
Modern banks practice fractional-reserve banking, which is the key to money creation. Note that: - Modern reserves take the form of vault cash and Federal Reserve deposits.
- Both ensure the safety of deposits.
- Banks seek profits by making loans and adding to checkable deposits.
- Checkable deposits add to the money supply.
Money creation:- Banks practice fractional-reserve banking, seek revenue through loans, and keep reserves.
- Banks keep 10% of outstanding deposits in reserves.
- Reserves over those required to are excess reserves.
- If a bank has excess reserves, then it can make loans, increase checkable deposits, and create money.
|
|
|
|
|
|
|
LIQUIDITY The ease with which an asset can be converted to money with little or no loss of value. Money, currency and checkable deposits, is the benchmark for liquidity. Money is what other assets are converted to. Different assets have differing degrees of liquidity. Financial assets have differing degrees of liquidity but tend to be more liquid that physical assets. Liquidity is important to components of the three monetary aggregates tracked and reported by the Federal Reserve System--M1, M2, and M3.
Complete Entry | Visit the WEB*pedia |
|
|
PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time at the confiscated property police auction trying to buy either yellow cotton balls or a set of steel-belted radial snow tires. Be on the lookout for attractive cable television service repair people.
Your Complete Scope
This isn't me! What am I?
|
|
|
Sixty percent of big-firm executives said the cover letter is as important or more important than the resume itself when you're looking for a new job
|
|
|
"If anything terrifies me, I must try to conquer it. " -- Francis Charles Chichester, yachtsman, aviator
|
|
BHC
Bank Holding Company
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
