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10 Cards in this Set
- Front
- Back
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Price Stability
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central bankers define as low and stable inflation, the most important goal of monetary policy
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a nominal variable such as the inflation rate of the money supply, which ties down the price level to achieve price stability
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Nominal Anchor
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Time-inconsistency problem
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the problem that occurs when monetary policymakers cocnduct monetary policy in a discretionary way and pursue expansionary polices that are attractive in the short run but lead to bad long-run outcomes
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monetary base
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currency in circulation plus reserves
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The money supply is negatively related to the.....
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required reserve ratio (r)
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the money supply is negatively related to the amount of.....
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excess reserves
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the money supply is positively related to....
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nonborrowed monetary base
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two primary features that determine the Money supply?
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1. open market operations
2. Discount Lending |
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Nonborrowed Monetary base=
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Monetary base-borrowed reserves from the Fed
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The monetary base minus banks' borrowings from the Fed (discount loans)
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Nonborrowed Monetary base
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