Macroeconomics Ch.22

Front 1

The direct exchange of goods and services for other goods and services

Back 1

Barter

Front 2

Items used as money that also have intrinsic value in some other use

Back 2

Commodity Monies

Front 3

The decrease in the value of money that occurs when its suplly is increased rapidly

Back 3

Currency Debasement

Front 4

Intrest rate that banks pay to the Fed to borrow from it

Back 4

Discount Rate

Front 5

The difference between a bank's actual reserves and its required reserves

Back 5

Excess Reserve

Front 6

It sets goals concerning the money supply & intrest rates and directs the operation of the Open Market Desk in New York

Back 6

Federal Open Market Committee (FOMC)

Front 7

The Central Bank of the United States

Back 7

Federal Reserve System (the FED)

Front 8

Items designated as money that are intrinsically worthless

Back 8

Fiat, or token, money

Front 9

Banks and other institutions that act as a link between those who have money to lend and those who want to borrow money

Back 9

Financial Intermediaries

Front 10

Money that a government has required to be accepted in settlement of debts

Back 10

Legal Tender

Front 11

One of the functions of the FED, it provides funds to troubled banks that cannot find any other sources of funds

Back 11

Lender of Last Resort

Front 12

The propert of money that makes it a good medium of exchange as well as a store of value: It is portable and readily accepted and thus easily exchanged for goods

Back 12

Liquidity Propert of Money

Front 13

Money that can be directly used for transactions

Back 13

M1, or transactions money

Front 14

M1 plus sacings accounts, money market accounts and other near monies

Back 14

M2, or broad money

Front 15

What sellers generally accept and buyers generally use to pay for goods and services

Back 15

Medium exchange, or means of payment

Front 16

The multiple by which deposits can increase for every dollar increase in reserves; equal to one divided by the required reserve ratio

Back 16

Money Multipllier

Front 17

The pressure that in the past the Fed exerted on member banks to discourage them from borrowing heavily from the Fed

Back 17

Moral Suasion

Front 18

Close substitutes for transactions money, such as savings accounts and money market accounts

Back 18

Near Monies

Front 19

The office in the New York Federal Reserve Bank from which government securities are bought and sold by the Fed.

Back 19

Open Market Desk

Front 20

The purchase and sale by the Fed of government securities in the open market; a tool used to expand or contract the amount of reserves in the system and thus the money supply

Back 20

Open Market Operations

Front 21

The multiple by which deposits can increase for every dollar increase in reserves; equal to one divided by the required reserve ratio

Back 21

Money Multipllier

Front 22

The pressure that in the past the Fed exerted on member banks to discourage them from borrowing heavily from the Fed

Back 22

Moral Suasion

Front 23

Close substitutes for transactions money, such as savings accounts and money market accounts

Back 23

Near Monies

Front 24

The office in the New York Federal Reserve Bank from which government securities are bought and sold by the Fed.

Back 24

Open Market Desk

Front 25

The purchase and sale by the Fed of government securities in the open market; a tool used to expand or contract the amount of reserves in the system and thus the money supply

Back 25

Open Market Operations

Front 26

The percentage of its total deposits that a bank must keep as reserves at the Federal Reserve

Back 26

Required Reserve Ratio

Front 27

The deposits that a bank has at the Federal Reserve bank plus its cash on hand

Back 27

Reserves

Front 28

Occurs when many of those who have claims on a bank (deposits) present them at the same time

Back 28

Run on a Bank

Front 29

An asset that can be used to transport purchasing power from one time period to another

Back 29

Store of Value

Front 30

A standard unit that provides a consistent way of quoting prices

Back 30

Unit of account

Front 31

Currency held outside banks + demand deposits + traveler's checks + other checkable deposits

Back 31

M1

Front 32

M1 + savings accounts + money market accounts + other near monies

Back 32

M2

Front 33

_____________1______________
Required Reserve Ration

Back 33

Money Multiplier