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***ECON > Macro Economics 4 > Flashcards

Macro Economics 4 Flashcards

1
Q

Name three functions of money

A

A medium of exchange, a unit of account, a store of value,

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2
Q

Expansionary Monetary Policies

A

Increase money supply, shift MS right, decrease interest rates, increase investment, increase aggregate demand

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3
Q

Contractionary Monetary Policies

A

Decrease money supply, shift MS left, increase interest rates, decrease investment, decrease aggregate demand

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4
Q

3 Shifters of Money Supply

A

Reserve Requirement, Discount Rate, Open Market Operations

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5
Q

Reserve Requirement

A

the percentage of deposits a bank must hold all time (direct relation between Res. Requirement and Money Supply)

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6
Q

Discount Rate

A

The interest rate the central bank charges a commercial bank with (Inverse relation between disc. rate and money supply)

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7
Q

Open market operations

A

Selling and buying government bonds (buy bonds-increase MS, sell bonds decrease MS)

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8
Q

Federal Funds Rate

A

The federal funds rate is the interest rate banks charge on another

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***ECON (27 decks)

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