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25 Cards in this Set
- Front
- Back
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Financial Markets
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markets in which funds are transferred from people who have an excess of available funds to people who have a shortage
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security (financial instrument)
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is a claim on the issuer's future income or assets (any financial claim or piece of property that is subject to ownership)
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bond
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a debt security that promises to make payments periodically for a specified period of time
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interest rate
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the cost of borrowing or the price paid for the rental of funds (usually expressed as a percentage of the rental of $100 per year)
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common stock
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represents a share of ownership in a corporation
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financial intermediaries
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institutions that borrow funds from people who have saved and in turn make loans to others
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financial crises
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major disruptions in financial markets that are characterized by sharp declines in asset prices and the failures of many financial and non financial firms
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banks
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financial institutions that accept deposits and make loans
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money supply
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anything that is generally accepted in payment for goods or services or in the repayment of debts
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aggregate output
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total production of goods and services
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unemployment rate
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the percentage of the available labor force unemployed
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business cycles
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the upward and downward movement of aggregate output produced in the economy
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recessions
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periods of declining aggregate output
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monetary theory
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the theory that relates changes in the quantity of money to changes in aggregate economic activity and the price level
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aggregate price level
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the average price of goods and services in an economy
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inflation
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a continual increase in the price level, affects individuals, businesses, and the government
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inflation rate
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the rate of change of the price level, usually measured as a percentage change per year
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monetary policy
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the mangaement of money and interest rates
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central bank
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the organization responsible for the conduct of a nation's monetary policy is the central bank
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Fiscal Policy
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involves decisions about government spending and taxation
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budget defecit
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is the excess of government expenditures over tax revenues for a particular time period
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budget surplus
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tax revenues exceed government expenditures
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GDP
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a measure of aggregate output
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The foreign exchange market
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is where currency conversion takes place
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foreign exchange rate
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the price of one country's currency in terms of another's is determined
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