10.3+Outline+and+Questions

=Money supply is all the money available in the United States economy= =Liquidity is the ability to be used as cash= =demand deposits allow checks to be paid on demand= =Deposits in money market mutual funds are also included as part of M2= =A bank that lends out the remainder is called fractional reserve banking= =default is failing to pay back loans= =A mortgage is a specific type of loan that is used to buy real estate= =interest is the price paid for the use of borrowed money= =The amount borrowed is called the principal= =Debit Cards are used to withdraw money= =QUESTIONS # 1-4= =1. M1 people can get access to immediately and M2 is M1 plus more assets= =2. Debit Cards let you withdraw money= =3. Automated Teller machines, debit cards, home and online banking= =4. They must make sure they do not loan too much money to someone who will not pay it back=