Term
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Definition
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the market for money in which the amount supplied and the amount demanded meet to determine the nominal interest rate
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Term
| transaction demand for money |
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Definition
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the demand for money based on the desire to facilitate transactions
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Term
| principle of opportunity cost |
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Definition
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the opportunity cost of something is what you sacrifice to get it
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Term
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Definition
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what matters to people is the real value of money or income- its purchasing power- not the face value of money or income
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Term
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Definition
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not easily transferable to money
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Term
| liquidity demand for money |
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Definition
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the demand for money that represents the needs and desires individuals and firms have to make transactions on short notice without incurring excessive costs
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Term
| speculative demand for money |
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Definition
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the demand for money that arises because holding money over short periods is less risky than holding stocks or bonds
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Term
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Definition
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the purchase or sale of U.S. government securities by the Fed
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Term
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Definition
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the Fed's purchase of government bonds from the private sector
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Term
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Definition
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the Fed's sale of government bonds to the private sector
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Term
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Definition
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the interest rate at which banks can borrow from the Fed
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Term
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Definition
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the market in which banks borrow and lend reserves to and from one another
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Term
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Definition
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the interest rate on reserves that banks lend each other
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Term
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Definition
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the rate at which currencies trade for one another in the market
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Term
| depreciation of a currency |
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Definition
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a decrease in the value of a currency
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Term
| appreciation of a currency |
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Definition
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an increase in the value of a currency
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