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  1. a central bank's changing of the money supply to influence interest rates and assist the economy in achieving price stability, full employment, and economic growth
    monetary policy
  2. the buying and selling of U.S. government securities by the Federal Reserve Banks for purposes of carrying out monetary policy
    open market operations
  3. the percentage of depositor's balances banks must have on hand as cash
    reserve ratio
  4. the interest rate that the Federal Reserve Banks charge in the same direction, for example, product price and quantity supplied
    discount rate
  5. Federal Reserve System actions to increase the money supply to lower interest rates and expand real GDP
    easy money policy
  6. Federal Reserve System actions that contract, or restrict, the growth of the nation's money supply for the purpose of reducing or eliminating inflation
    tight money policy
  7. the number of times per year that the average dollar in the money supply is spent for final goods and services; nominal GDP divided by the money supply
    velocity of money
  8. monetary policy may be highly effective in slowing expansions and controlling inflation but much less reliable in pushing the economy from a recession-particularly if it is severe
    cyclical asymmetry
  9. The interest rate banks and other depository institutions charge one another on overnight loans made out of their excess reserves.
    Federal funds rate
  10. the interest rate banks charge their most creditworthy borrowers--for example, large corporations with excellent credit records
    prime interest rate
Card Set
econ vocab 15
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