Econ Ch 15

Front 1

Monetary policy

Back 1

Central bank's changing of the money supply to influence interest rates and assist the economy in achieving price stability, full employment, and economic growth

Front 2

Open market operations

Back 2

Buying of government bonds from, or selling of government bonds to, commercial banks and the general public

Front 3

Reserve ratio

Back 3

Fed manipulating the reserve ratio in order to influence the ability of commercial banks to lend

Front 4

Discount rate

Back 4

Interest rate charged when commecial banks borrow from the reserve

Front 5

Easy money policy

Back 5

(Expansionary monetary policy) To make bank loans less expensive and more avaliable to increase AD

Front 6

Tight money policy

Back 6

(Restrictive monetary policy) To tighten the supply of money in order to reduce spending and control inflation

Front 7

Federal funds rate

Back 7

Interest rate that banks charge one another on overnight loans of reserves held at the Federal Reserve Banks

Front 8

Prime interest rate

Back 8

Benchmark rate that banks use as a reference point for a wide range of interest rates to businesses and individuals

Front 9

Velocity of money

Back 9

Number of times per year the average dollar is spent on goods and services

Front 10

Cyclical asymmetry

Back 10

Any large imbalance in economic factors that occur due to purely cyclical reactions by the market

Front 11

Inflation targeting

Back 11

The annual statement of a target range of inflation