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Economics for Business > Module 18 - Money and interest rates > Flashcards

Module 18 - Money and interest rates Flashcards

1
Q

Describe the functions of money

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2
Q

Monetary financial institutions

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3
Q

Retail banking

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4
Q

Wholesale banking

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5
Q

Financial instruments

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6
Q

Liabilities

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7
Q

Sight deposits

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8
Q

Time deposits

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9
Q

Sale and repurchase agreements

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10
Q

Certificates of deposit

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11
Q

Gearing (or leverage)

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12
Q

Assets

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13
Q

Market loans

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14
Q

Bills of exchange

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15
Q

Treasury bills

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16
Q

Reverse repos

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17
Q

Maturity gap

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18
Q

Liquidity

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19
Q

Liquidity ratio

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20
Q

Sub-prime debt

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21
Q

Capital adequacy ratio

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22
Q

Secondary marketing

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23
Q

Securitisation

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24
Q

Special purpose vehicle (SPV)

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25
Q

Collateralised debt obligations

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26
Q

Co-ordination failure

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27
Q

Global systematically important banks (G-SIBs)

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28
Q

Macro-prudential regulation

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29
Q

Lender of last resort

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30
Q

Prudential control

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31
Q

Open market operations

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32
Q

Exchange equalisation account

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33
Q

Money market

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34
Q

Discount market

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35
Q

Rediscounting

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36
Q

Describe the functions of banks

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37
Q

Describe the liabilities and assets of retail banks

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38
Q

Explain the conflict between liquidity and profitability

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39
Q

Explain what is meant by capital adequacy and why it is important

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40
Q

Explain how secondary marketing can reconcile the conflicting objectives of liquidity and profitability

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41
Q

Explain the process of securitisation

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42
Q

Discuss the effects of securitisation

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43
Q

Explain the reasons for the financial crisis of 2008

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44
Q

Give examples of regulations introduced in response of the financial crisis

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45
Q

Describe the functions of the central bank

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46
Q

Describe the operation of the money market

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47
Q

Explain the ways in which the central bank can increase the liquidity of the banking system

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48
Q

Monetary base

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49
Q

Broad money

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50
Q

Bank multiplier

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51
Q

Money multiplier

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52
Q

Non-bank private sector

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53
Q

Quantitative easing (QE)

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54
Q

Financial instability hypothesis

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55
Q

Exogenous money supply

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56
Q

Endogenous money supply

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57
Q

Explain the credit creation process in theory

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58
Q

Explain the five main ways in which a change in the money supply could arise

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59
Q

Describe the three main motives for holding money

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60
Q

Discuss the five main factors affecting the demand for money

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61
Q

Explain the effect on interest rates of a change in the supply of money

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62
Q

Explain the effect on interest rates of a change in the demand for money

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63
Q

Equation of exchange

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64
Q

Velocity of circulation

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65
Q

Describe the effect of an increase in the money supply on the exchange rate and the balance of payments

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66
Q

State and describe the equation of exchange

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67
Q

Describe the effect of a change in the money supply on output and prices

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68
Q

Explain the transmission mechanisms that translate a change in the money supply to a change in GDP

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69
Q

Discuss the strengths of the links in the monetary transmission mechanisms

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Economics for Business (20 decks)

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