Details

Title: Ch 11:Money Creation & Control

Description: Unit 4 - Foundations of Macroeconomics

Total Flash Cards: 9

Created: 01/22/2008 11:32:41

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Cards in this set:

Term
Balance Sheet
 Definition
A statement that summarizes assets (amounts owned) and liabilities (amounts owed)
Term
Reserve Ratio
 Definition
The proportion of a bank's total deposits that are held in reserves
Term
Desired Reserve Ratio
 Definition
The ratio of reserves to deposits that banks wish to hold so that they are sure to have enough cash to cover withdrawals by their customers
Term
Excess Reserves
 Definition

Actual reserves

minus

desired reserves
Term
Deposit Multiplier
 Definition
The number by which an increase in bank reserves is multiplied to find the resulting increase in bank deposits
Term

Currency Drain

 Definition
An increase in currency held outside the banks
Term
Money Multiplier
 Definition
The number by which a change in the monetary base is multiplied to find the resulting change in the quantity of money
Term
Explain how banks create money by making loans
 Definition
P.161
Term
Explain how the Bank of Canada influences the quantity of money
 Definition
P.161