ch 15 Macroeconomics

  1. Fraccional reserve banking
    A system in which banks keep only a percentage of their deposits on reserve as vault cash and deposits at the Fed.
  2. Requiered Reserves
    The minimum balance that the Fed requieres a bank to hold in vault cash or on deposit with the Fed.
  3. Requiered reserve ratio
    The percentage of deposits that the Fed requieres a bank to hold in bank cash or on deposits with the Fed.
  4. Excess reserves
    Potential loan balances held in vault cash or on deposits with the Fed in excess of requiered reserve.
  5. Monetary policy
    The federal reserve's use of open market operations, changes in the discount rate, and changes in the requiered reserve ratio to change the money supply (M1)
  6. Open market operations
    The buying and selling of goverment securities by the Fed.
  7. Discount rate
    The interest rate the Fed charges on loans of reserves to banks
  8. Federal faunds
    A private market in which banks lend reserve for less than 24 hours.
  9. Federal found rate
    The interes rate banks charge for overnight loans of reserves to other banks.
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ch 15 Macroeconomics