Chapter 26 Flashcards
Excess demand for Bonds
The amount of bonds demanded exceeds the amount supplied at a particular interest rate
Excess Supply of Money
The amount of money supplied exceeds the amount demanded at a particular interest rate
Federal Funds Rate
The interest rate charge for loans of reserves among banks
Monetary Policy
Control or manipulation of interest rates by the Federal Reserve to achieve a macroeconomic goal
Money Demand Curve
A curve indicating how much money will be demanded at each nominal interest rate
Money Supply Curve
A line showing the total quantity of money in the economy at each interest rate
Spread
The difference between an interest rate and some other, benchmark interest rate
Wealth Constraint
At any point in time, wealth is fixed
Zero Lower Bound
The Lowest possible value (zero) for any nominal interest rate (such as the federal funds rate)
