ECON CH15

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

the buying and selling of U.S. government securities by the Federal Reserve Banks for purposes of carrying out monetary policy

the percentage of depositor's balances banks must have on hand as cash

the interest rate that the Federal Reserve Banks charge in the same direction, for example, product price and quantity supplied

Federal Reserve System actions to increase the money supply to lower interest rates and expand real GDP

Federal Reserve System actions that contract, or restrict, the growth of the nation's money supply for the purpose of reducing or eliminating inflation

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

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

The interest rate banks and other depository institutions charge one another on overnight loans made out of their excess reserves.

the interest rate banks charge their most creditworthy borrowers--for example, large corporations with excellent credit records