Monetary Class Notes Flashcards
Too much money leads to _________ and too little money leads to ___________.
Inflation
Unemployment
M1 money is just over how much in our economy?
$3 trillion
The M1 money is considered the what?
The liquidity
Money has to grow as fast as the GDP or it will _______ _________ the growth path of GDP.
Pull down
What populist argued we could back the money by silver and gold?
William Jennings Bryant
What children’s movie was an economic allegory representing the gold standard?
Wizard of Oz
When the country was first formed what two people argued about monetary policy?
Hamilton and Jefferson
Hamilton argues for what kind of bank?
Centralized bank
Jefferson argues for what kind of bank?
Decentralized bank
When was the National Banking Act passed creating a centralized bank?
1863
What problem did the first National Banking Act have?
Geographic problems
When was the Federal Reserve Act?
1913
How many district banks are in the Federal Reserve?
12
Minneapolis has what number of central banks?
9
When you deposit currency (physical money) it is no longer considered what?
Money
The reserve requirement is too ___________ of a monetary tool and hardly used.
Powerful
The setting of discount rates is too ____________ and is also hardly used.
Ineffective
The tool that is most effective and the only one that the Federal Reserve uses is what?
Open market operations
The Fed buys bonds to solve ___________ and the Fed sells bonds to solve _____________.
Unemployment
Inflation
What are the two kinds of reserves?
Required reserves
Excess reserves
You divide one by the reserve ratio and get the multiplied number the money will become. For example 1/.10= 10 so $10,000 deposited back and forth will become how much?
$100,000
How much money do we have in the economy and how many times is the money spent in a year?
$3.5 trillion
5 times
Open market bond purchase take a place where?
New York
The Federal Reserve is in charge of what banks?
National banks
Who is in charge of state banks?
State bank commission
A bank to bank loan is called what?
Federal fund loan
The interest you pay on a bank to bank loan is what?
Federal funds rate
The discount rate is a _________ Rate and the Federal Funds Rate is a __________ Rate.
Fixed
Market
