Answer:
1) Money is a medium of exchange. We currently use coins and bills as money.
The money supply of an economy is the total amount of money available in the economy.
M1: includes all coins and bills in circulation, travelers' checks and checking accounts
M2: includes M1 + short term bank deposits and 24 hour money market funds
M3: includes M2 + long term deposits and money market funds with more than 24 hour maturity
2) Federal Reserve Banks (in other countries are called Central Banks): conducts monetary policy, maintains an effective payment system, and supervises the other financial institutions
Commercial banks: savings account, checking account, CDs, personal loans, mortgages, credit cards and business accounts and loans
Internet banks: offer the same products as commercial banks but offer their services online only
Credit unions: offer similar services as commercial banks but only to their associates, who are also the owners of the credit union (e.g. teachers' credit union, military personnel credit union)
Savings and loans associations: similar to credit union but open to diverse participants
Investment banks: raise capital for businesses and governments through the issue of securities
Brokerage firms: trade securities for individuals or organizations
Insurance companies: provide the service of transferring the risk of loss
Mortgage companies: fund mortgage loans
3) The FED's main functions include conducting monetary policy, maintains an effective payment system, and supervises the other financial institutions
