Term
|
Definition
| any item sellers generally acceept and buyers generally use to pay for a good or service; money; a conventient means of exchanging goods and services without engaging in barter |
|
|
Term
|
Definition
| a standard unit in which prices can be stated and the value of goods and services can be compared; one of the three functions of money |
|
|
Term
|
Definition
| an asset set aside for future use; one of the three functions of money |
|
|
Term
|
Definition
| the ease with which an asset can be convrted quickly into cash with little or no loss of purchasing power |
|
|
Term
|
Definition
| the most narrowly defined money supply, equal to currency in the hands of the public and the checkable deposits of commerical banks and thrift institutions |
|
|
Term
|
Definition
| a firm that engages in the business of banking (acepts deposits, offers checking accounts, and makes loans) |
|
|
Term
|
Definition
| a savings and loan association, mutual savings bank, or credit union |
|
|
Term
|
Definition
| financial assets, the most important of which are noncheckable savings accounts, time deposists, and US short-term securities and savings bonds, which are not a medium of exchange but can be readily converted into money |
|
|
Term
|
Definition
| a more broadly defined money supply, equal to M1 plus noncheckable savings accounts (including MMDAs) small time deposits (deposits of less than $100000) and individual money market mutal fund balances |
|
|
Term
|
Definition
| a deposit in a commerical bank or thrift institution on which interest payments are received; generally used for saving rather than daily transactions; a component of the M2 money supply |
|
|
Term
| money market deposit account (MMDA) |
|
Definition
| bank and thrift provided interest bearing accounts that contain a variety of short-term securities; such accounts have minimum balance requirements and limits on the frequency of withdrawals |
|
|
Term
|
Definition
| an interest-earning deposit in a commericla bank or thrift institution that the depositor can withdraw without penalty after the end of a specified period |
|
|
Term
| money market mutual fund (MMMF) |
|
Definition
| interest-bearing accounts offered by investment comparines, which pool depositors' funds for the purchase of short-term securities |
|
|
Term
|
Definition
| a legal designation of a nation's official currency (bills and coins). payment of debts must be accepted in this monetary unit, but creditors can specify the form of payment, for example, "cash only" or "check or credit card only" |
|
|
Term
|
Definition
| the US central bank, consisting of the Board of Governors of the Fed and the 12 Fed reserve banks, which controls the lending activity of the nation's banks and thrifts and thus the money supply |
|
|
Term
|
Definition
| the 7 member group that supervises and controls the money and banking system of the US; |
|
|
Term
|
Definition
| the 12 banks chartered by the US govt to control the money supply and perform other functions |
|
|
Term
| Federal Open Market Committee (FOMC) |
|
Definition
| the 12-member group that determines the purchase and sale policies of the Fed Reserve Banks in the market for US govt securities |
|
|
Term
| financial services industry |
|
Definition
| the broad category of firms that provide financial products and services to help households and businesses earn interest, receive dividends, obtain capital gains, insure against losses, and plan for retirement. Includes commerical banks, thrifts, insurance companies, mutual fund companies, pensions funds, investment banks, and securities firms |
|
|
Term
|
Definition
| purchases made by transferring funds electronically (Fedwire transfers, automated clearing house transations, payments via PayPal) |
|
|
Term
| fractional reserve banking system |
|
Definition
| a reserve requirement that is less than 100% of the checkable deposit liabilities of a commerical bank or thrift instituion |
|
|
Term
|
Definition
| a statement of the assets, liabilities, and net worth of a firm of individual at some given time |
|
|
Term
|
Definition
| the currency a bank has in its vault and cash drawers |
|
|
Term
|
Definition
| the funds that banks and thrifts must deposit with the Fed to meet the legal reserve requirement; a fixed percentage of the bank's or thrift's checkable deposits |
|
|
Term
|
Definition
| the fraction of checkable deposits that a bank must hold as reserves in a Fed Bank or in its own bank vault; reserve requirement |
|
|
Term
|
Definition
| the amount by which a bank's or thrift's actual reserves exceed its required reserves; actual reserves - required reserves |
|
|
Term
|
Definition
| teh funds that a bank has on deposit at the Federa Reserve Bank of its district (plus its vault cash) |
|
|
Term
|
Definition
| the interest rate banks and other depository institutions charge one another on overnight loans made out of their excess reserves |
|
|
Term
|
Definition
| the multiple of its excess rreserves by which the banking system can expand checkable deposits and thus money supply by making new loans (or buying securites); 1/reserve requirement |
|
|
Term
|
Definition
| a central bank's changing of the moneyu supply to influence interest rates and assist the economy in acheiving price stability, full employment, and economic growth |
|
|
Term
|
Definition
| the payment made for teh use of money (of borrowed funds) |
|
|
Term
|
Definition
| the amount of money people want to hold for use as a medium of exchange (to maek payments); varies directly with nominal GDP |
|
|
Term
|
Definition
| the amount of money people want to hold as a storre of value; this amount varies inversely with the interest rate |
|
|
Term
|
Definition
| the sum of the transactions demand for money and teh asset demand for money |
|
|
Term
|
Definition
| the buying and seeling of US govt securities by the Fed Banks for purposes of carrying out monetary policy |
|
|
Term
|
Definition
| the interest rate that the Fed Banks charge on the loans they make to commerical banks and thrift institutions |
|
|
Term
|
Definition
| the moentary policy procedure used by the Fed, in which commerical banks anonymously bid to obtain loans being made available the by Fed as a way to expand reserves in the banking system |
|
|
Term
| expansionary monetary policy |
|
Definition
| Fed system actions to increase the money supply, lower interest rates, and expand real GDP; an easy money policy |
|
|
Term
|
Definition
| the benchmark interest rate that banks use as a reference point for a wide range of loans to businesses and individuals |
|
|
Term
| restrictive monetary policy |
|
Definition
| Fed actions to reduce the money supply, increase interest rates, and reduce inflation; a tight money policy |
|
|
Term
|
Definition
| a modern moentary rule propsed by eocnomist John Taylor that would stipulate exactly how much the Fed should change real interest rates in response to divergences of real GDP from potential GDP and divergences of actual rates of inflation from a target rate of inflation |
|
|
Term
|
Definition
| the idea that monetary policy may be more successful in slowing expansions and controlling inflation than in extracting the economy from severe recession |
|
|
Term
|
Definition
| the period beginning in late 2007 when thousands of homeowners defaulted on mortgage loans when they experienced a combo of higher mortgage interest rates and falling home prices |
|
|
