17;s central banking organization; functions include processing checks, serving as the government’s banker, and controlling the rate of growth of the money supply.2. Monetary policy : policy that involves changing the rate of growth of the supply of money in circulation to affect the amount of credit and, therefore, business activity in the economy.3. Reserve requirements : regulations set by the Fed, requiring banks to keep a certain percentage of their deposits as cash in their own vaults or as deposits in their district Federal Reserve Bank.Chapter 16Section 21. Check clearing: method by which a check that has been deposited in one depository institution is transferred to the depository institution on which it was written.Chapter 16Section 31. Discount rate: interest rate the Fed charges on loans to banks.2. Prime rate: rate of interest banks charge on loans to their best business customers.3. Open-market operations: buying and selling of United States securities by the Fed to affect the money supply by changing depository institution reserves or by putting money into or taking it out of circulation in the economy....
