Banking And Finances Flashcards
Budget deficit?
Government spends mire than it takes in
Automatic stabilizers?
Policy features that work automatically to stabilize the economy
Budget surplus?
Government takes in more than it spends
Central bank?
Federal reserve bank
Contractionary fiscal policy?
Plan to slow the economy and reduce inflation
Deficit spending?
Government practice of spending more than it takes in for a specific budget year
Discretionary spending?
Refers to the actions selected by the government to stabilize the economy
Federal open market committee (F.O.M.C.)?
Most important monetary policy making body of the FED
FED discount rate?
Interest rate that the FED charges when it lends money to other banks
Federal reserve bank?
Central bank of the U.S., an independent organization within the government with both public and private characteristics
Fiscal policy?
The federal government’s use of taxes and government spending to affect the economy
Mandatory spending?
Makes up over half of all government spending
Reserve requirement ratio (R.R.R.)?
Fraction of a banks deposits that it must keep in reserve
Transfer payments?
Transfer of income from one person or group to another even though the receiver doesn’t pay anything in return
Treasury bonds?
A government security that tajes 30 years to mature
Anti-trust legislation?
Law that breaks up monopolies
Federal reserve note?
U.S. currency
What is the structure of the federal reserve bank?
Board of governors- forms monetary policy
F.O.M.C- main monetary policy making body of the FED
Reserve bank- holds money supervises banks
Board of directors recommends monetary policy, brings original perspective of district
What are the roles of government in the economy?
Private property rights, externalities, ensure market competition, consumer protections, public goods and services, redistribution of income
