GLOSSARY Terms related to the Federal Reserve, banking and economics   A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |   M1 Measure of the U.S. money stock that consists of currency held by the public, travelers checks, demand deposits and other checkable deposits including NOW (negotiable order of withdrawal) and ATS (automatic transfer service) account balances and share draft account balances at credit unions.   M2 Measure of the U.S. money stock that consists of M1, certain overnight repurchase agreements and certain overnight Eurodollars, savings deposits (including money market deposit accounts), time deposits in amounts of less than $100,000, and balances in money market mutual funds (other than those restricted to institutional investors).   M3 Measure of the U.S. money stock that consists of M2, time deposits of $100,000 or more at all depository institutions, term repurchase agreements in amounts of $100,000 or more, certain term Eurodollars and balances in money market mutual funds restricted to institutional investors.   macroeconomics The study of economics in terms of whole systems with reference to general levels of output and income and to the interrelations among sectors of the economy. See also microeconomics.   management fee The fee paid to a company for managing an investment portfolio.   margin With regard to securities, this term refers to a fractional amount of full value, or the equity outlay (down payment) required for an investment in securities purchased on credit.   margin stock Any stock listed on a national securities exchange, any over-the-counter security approved by the SEC for trading in the national market system, or appearing on the Board's list of over-the-counter margin stock and most mutual funds.   market interest rates Rates of interest paid on deposits and other investments, determined by the interaction of the supply of and demand for funds in the money market.   market value The amount a seller can expect to receive on the open market for merchandise, services or securities.   maturity The time when a note, bond or other investment option comes due for payment to investors.   member bank Depository institution that is a member of the Federal Reserve System. All federally chartered banks are automatically members of the System. State-chartered banks are divided into those that are members of the System (state member banks) and those that are not (nonmember banks).   microeconomics The study of economics in terms of individual areas of activity (as a firm, household or prices). See also macroeconomics.   Monetary Control Act of 1980 (MCA) Act which requires that all banks and all institutions that accept deposits from the public make periodic reports to the Federal Reserve System. Starting in September 1981, the Fed charged banks for a range of services that it had provided free in the past, including check clearing, wire transfer of funds and the use of automated clearinghouse facilities.   monetary policy A central bank's actions to influence the availability and cost of money and credit, as a means of helping to promote national economic goals. Tools of monetary policy include open market operations, discount policy and reserve requirements.   money Anything that serves as a generally accepted medium of exchange, a standard of value and a means to save or store purchasing power. In the United States, currency (the bulk of which is Federal Reserve notes), coin and funds in checking and similar accounts at depository institutions are examples of money.   money market savings account A type of savings account offered by a financial institution.   money supply Total quantity of money available for transactions and investment; measure of the U.S. stock including M1, M2 and M3. (Also referred to as the money stock or simply money.)   moral hazard The risk that a party to a transaction has not entered into a contract in good faith; has provided misleading information about its assets, liabilities or credit capacity; or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles.   mortgage A temporary and conditional pledge of property to a creditor as security for the repayment of a debt.   municipal bond A bond issued by cities, counties, states and local governmental agencies to finance public projects, such as construction of bridges, schools and highways.   mutual fund A pool of money managed by an investment company.