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13 Cards in this Set
- Front
- Back
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interest rate |
annual percentage rate for the use of borrowed money. |
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transactions demand for money |
holding money as a medium of exchange |
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asset demand for money |
money as a store of wealth |
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monetary policy |
designed to change money supply, credit availability and interest rates (Bank of Canada responsible) |
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expansionary monetary policy (easy money policy) |
increase money in economy + make credit cheaper & easily available |
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contractionary monetary policy (tight money policy) |
money in economy decreases + credit become harder and are more expensive |
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open-market operations |
buying and selling of securities by bank of Canada to the open-market |
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transmission process |
how changes in money affect real variables in economy. Interest rate as link. |
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quantitative easing |
purchase of long-term bonds to stimulate the economy |
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monetarism |
fluctuations of GDP & inflation are caused by changes in MS (Money Supply) |
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equation of exchange |
quantity of money times velocity of money = nominal GDP (price x real GDP) MV = PQ |
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overnight interest rate |
interest rate that commercial banks charge each other on short-term loans |
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target for overnight rate |
bank of Canada's key policy interest rate. Midpoint of Bank rate (commercial banks to Bank of Canada) and Banker's deposit rate (rate that Bank of Canada pays the Commercial banks on deposits) |
