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45 Cards in this Set
- Front
- Back
- 3rd side (hint)
Monetarism |
Theory/practice of controlling supply of $ as main method of stabilizing econony |
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Easy Money Policy |
Increases $ supply by lowering interest rates |
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Tight money policy |
Restrict credit and raise interest rates |
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Inside lag |
Amt. of time it takes for a govt /central bank to respond to a shock in the economy |
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Outside lag |
time it takes for a govt/central bank's actions... to have noticeable effect on econony |
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Money creation |
Process where $ supply of a country/monetary region is increased |
Eurozone |
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Required reserve ration |
Sets minimum fraction of customer deposits that each commercial bank must hold as reserves |
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Money Multiplier Formula |
Amt. of $ that banks generate with each $ of reserves |
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Excess reserves |
Bank reserves in excess of requirement set by central bank |
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Prime rate |
Lowest interest rate at which money may be borrowed commercially |
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Money |
Current medium of exchange in form of coins and banknotes (collectively) |
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Meduim of exchange |
Intermediary used in trade to avoid inconveniences of pure barter system |
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Barter |
Action/system of exchanging goods/services w/o using $ |
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Unit of account |
Nominal monetary unit of currency used to value/ cost goods, services, assets, liabilities, income, expenses |
acronym: used to value S.E.L.I.A |
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Store of value |
Function of an asset that can be saved, retrieved and exchanged at later time and be useful when retrieved |
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Currency |
System of money in general use in particular country |
Dollar; USA |
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Commodity Money |
$'s value comes from a commodity of which it is made |
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Representative money |
Token that has no intrinsic value, but can be exchanged for a commodity |
Ex: gold, silver, copper, and even tobacco |
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Specie |
Money in the form of coins rather than notes |
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Fiat Money |
In convertible paper money made legal tender by govt decree |
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Bank |
Financial institution licensed as a receiver of deposits |
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National Bank |
Commercial bank chartered under federal govt |
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Bank run |
When many bank customers withdraw their deposits simultaneously due to bank concerns |
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Credit card |
plastic card, issued by bank... allows holder to purchase things on credit |
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Interest |
Money paid regularly for use of money lent |
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Principle |
Amount borrowed |
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Debit card |
Card issued by bank allowing holder to transfer money electronically to another bank account when making purchase |
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Creditor |
A person/company to whom money is owed |
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Fiscal policy |
Changes in tax revenues of the federal govt, undertaken to promote full employment, price stability, and reasonable rates of economic growth |
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Board of governors |
7 - member committee that controls FRS |
Also called Federal Reserve board, or the Fed |
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Federal open market committee |
12 member group determines purchase/ sale policies of Federal Reserve Banks |
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Federal Reserve Banks |
12 banks charted by US GOVT to control the money supply |
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Greenback |
A dollar bill |
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Money supply |
Total money in circulation or in existence In a country |
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Liquidity |
Availability of liquid assets to a market or company |
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Demand deposit |
Deposit of money that can be withdrawn without prior notice |
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Gold standard |
GOLD |
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Central bank |
National Bank that provides financial services for its country's govt, implement monetary policy, and issue currency |
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Member bank |
Commercial banks that are members of and hold stock in FRS |
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Foreclosure |
Process of taking possession of a mortgaged property because of mortgager's failure to pay mortgage payments |
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Default |
Failure to fulfill and obligation |
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$ Markey Mutual Fund |
Open-ended mutual fund that invests in short-term debt securities such as US treasury bills and commercial paper |
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Fractional Reserve Banking |
bank accepts deposits, makes loans/ investments, and holds reserves that are fraction of its deposit liabilities |
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Mortgage |
Charging of personal property by a debtor to creditor as security for debt, on condition that it shall be returned on payment of debt within certain period |
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Reserves |
Currency deposits which are not lent out to banks clients |
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