exam 1 Flashcards
who is responsible for the trend or long-run behavior of the money supply
Central Bank
who is the central bank in the United States
The Federal Reserve System
what do the feds do
monetary policy
refers to the management of the money supply and interest rates
monetary policy
money supply increases more rapidly than the output of good and services
inflation
a continuing decline in prices and is more damaging to a nations economic health than inflation
deflation
what is a claim on the issuer’s future income or assets
security
what is a debt security that promises to make payments periodically for a specified period of time?
bond
the cost of borrowing or the price paid for the rental of funds. These are determined by market forces of supply and demand
interest rate
appreciation causes:
- higher prices to foreign buyers of exports
- lower prices to domestic consumers of imports
- a trade deficit
Depreciation causes:
- lower prices to foreign buyers of exports
- higher prices to domestic consumers o imports
- a trade surplus
institutions that borrow funds from people who have saved and make loans to other people
financial intermediaries
institutions that accept deposits and make loans
banks
government spending and taxation
fiscal policy
anything that is generally accepted in payment for goods or services or in the repayment of debts: a stock concept
Money