chapter 16 vocabulary

Required Reserve Ratio
the fraction of deposits that banks must keep on hand

open market operations
the buying and selling of government securities to alter the supply of money

federal funds rate
interest rate banks charge each other for loans

easy money policy
monetary policy that increases the money supply

check clearing
the process by which banks record whose account gives up money and whose account receives money

Board of Governors
the seven-member group that oversees the F.E.D. system

net worth
total assets minus total liabilities

prime rate
rate of interest banks charge on short-term loans to their best customers

tight money policy
Monetary policy that deceases the money supply

federal reserve districts
banking regions created by the federal reserve act

money creation
the process by which money enters into circulation

inside lag
delay in implementing monetary policy

banking holiday company
a company that owns more than one bank

outside lag
the time it takes for monetary policy to have an effect

monetary policy
the actions the FED takes to influence the level of real GDP and the reate of inflation in the economy

discount rate
rate the FED charges for emergency loans to banks

Federal Advisory Council (FAC)
the research arm of the FED

money multipiler formula
amount of new money created with each demand deposit

monetary policy refers to the actions taken by the Federal Reserve to influence GDP and rate of inflation in the economy reserves deposits that a bank keeps readily available as opposed to lending them out WE WILL WRITE A CUSTOM …

fiscal year 12-month period that can begin on any date fiscal policy the use of gov’t spending and revenue to influence the economy WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR ONLY $13.90/PAGE Write …

The constitution places what 2 powers on the governments power to tax? Federal taxes must be for the common defense and general welfare, and they must be the same in every state To what category do a person’s earnings, the …

cooperative a business organization owned and operated by a group of individuals for their mutual benefit corporations a legal entity owned by individual stockholders. they can offer money shares of stocks and can hire many people. WE WILL WRITE A …

Sources of confusion and problems with american banking between 1836 and 1907. Answer: States chartered some banks while the federal government chartered and regulated others Why the federal reserve system was unable to hold off the great depression. Answer: The …

medium of exchange Any item sellers generally accept and buyers generally use to pay for a good or service; money; a convenient means of exchanging goods and services without engaging in barter. unit of account A standard unit in which …

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