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24 Cards in this Set
- Front
- Back
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financial markets
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funds are transferred from people who have an excess of available funds to those who have a shortage; include bond and stock markets
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security
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claim on issuer's future income or assets
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bond
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debt security that promises to make payments periodically for a specified period of time
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interest rate
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cost of borrowing/price paid for the rental of funds
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5 parts of the financial system:
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-money
-financial instruments (used to transfer wealth or risk) -financial markets (buy and sell/transfer funds) -financial institutions (services, access and info) -central bank (monitor and stabilize economy, monitor fin. institutions) |
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common stock
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share of ownership in a corporation. security that is a claim on earnings and assets
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foreign exchange market
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where conversion of currencies takes place; det. foreign exchange rate
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foreign exchange rate
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price of one country's currency in terms of another
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financial intermediaries
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institutions that borrow funds from people who have saved and make loans to other people
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banks
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institutions that accept deposits and make loans
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other financial institutions
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insurance and finance companies, pension funds, mutual funds, investment banks
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money supply
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anything that is gen. accepted in pmt for g/s or in repmt of debts
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aggregate output
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total production of g/s
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business cycle
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up (expansion)/down (recessions) movement of aggregate output produced in the economy
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monetary theory
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relates changes in quantity of $ to changes in aggregate economic activity and price level
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aggregate price level
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average price of g/s in an economy
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inflation
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continual increase in P, affects individuals, businesses, and govt.
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inflation rate
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rate of change of P, usually measured as a % change per year
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monetary policy
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mgmt of money and interest rates
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central bank
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FED
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fiscal policy
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decisions about govt spending and taxation
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budget deficit
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excess of govt expenditures over tax revenues for a particular pd, typically a year
financed by borrowing |
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budget surplus
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tax revenues exceed govt expenditures
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gross domestic product
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measure of aggregate output
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