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7 Cards in this Set
- Front
- Back
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Discount Rate
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Interest rate charged to banks when the borrow from Fed
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Open market operations
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When Fed buys/sells Gov't securities
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Prime rate
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Interest rate charged to business by banks
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Monetary policy
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policy when Fed changes money supply (MS) to stabilize economy
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Contraction actions
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Increase money supply to decrease interest rates
- Decrease Reserve requirements - decrease discount rate |
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Inflation actions
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Decrease money supply to increase interest rates
- increase Reserve req. - increase discount rate |
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Keynes monetary policy
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Inflation: dec. MS, Inc. interest, dec. income, decr price.
mild Recess: inc. MS, dec. interest, incr. income, incr. AD |
