Flow of Funds Flashcards
1
Q
MM market funds
A
- Sentiment indicator
- It is favorable to invest in the stock market when MM funds show high rates of growth
2
Q
Velocity of money
A
GDP to M2
3
Q
Inverted yield curve interpretation
A
Predicts recessions two to six quarters ahead according to the FED
4
Q
Liquidity Coverage Ratio (LCR)
A
Total of category I financial assets (cash, gold bullion, obligations of the US government) / Cash necessary to operate the bank for 30 days
5
Q
Stagflation
A
Inflation coupled with high unemployment
6
Q
Free Reserves
A
A measurement of a bank’s reserves that is equal to the difference between borrowed reserves and excess reserves
