Term
| Expansionary monetary policy |
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Definition
| Buy securities, decrease discount rates and reserve requirements |
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Term
| Contractionary monetary policy |
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Definition
| Sell securities, increase discount rates and reserve requirements |
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Term
| The Federal Reserve System |
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Definition
| The central bank of the United States |
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Term
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Definition
| adjusting the quantity of money in the economy |
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Term
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Definition
| 7 members, 14 year terms. Appointed by the president, confirmed by the senate. Central oversight of the Federal Reserve System. BOG makes the rules for the Fed |
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Term
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Definition
Federal Open Market Committee
The Fed's main policy making committee. 12 members: 7 BOGs plus 5 Fed presidents. Sets Fed Funds target interest rate. Gives directive for Open market Operations. Contracts/restricts money supply |
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Term
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Definition
| Reserve requirements--BOG |
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Term
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Definition
| margin requirements -- BOG |
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Term
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Definition
| Open Market Operations -- FOMC |
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Term
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Definition
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Term
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Definition
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Term
| How does the Fed control interest rates in the US? |
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Definition
-Meets every six weeks
-Real GDP meeting in Feb and July
-Six other meetings discuss longer run money and credit targets
-Publish what they discuss at the previous meeting before the next one occurs in the beige book |
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Term
| Responsibilities of member banks |
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Definition
- Satisfy reserve requirements
- Comply with all FRS (not state) banking regulations
- Submit to general supervision and periodic examination
- Purchase shares of stock |
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Term
| FRS functions in providing services |
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Definition
- To banks:
Extend loans
Clear checks
- To the govt:
Regulate money supply
distribute US currency
Act as the govt fiscal agent
Supervision and regulation of the banking system
Fedwire
Buy/sell govt securities |
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Term
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Definition
| Non Acceleration Inflation Rate of Unemployment |
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Term
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Definition
| Falling unemployment generates a specific increase in the inflation rate |
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Term
| Responsibilities involved with monetary policy |
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Definition
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Term
| Purpose/goal of monetary policy |
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Definition
| maintain the trend of econ. output (GDP= 3%), employment, and prices at desired levels |
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Term
| What is the Fed's major concern? |
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Definition
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Term
| Why is the NY district bank so important? |
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Definition
| Contains the world's gold, where open market operations take place |
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Term
| There are ___ district banks and ____ branch banks |
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Definition
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Term
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Definition
| The Fed's ACH for large-scale financial transfers |
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Term
| The current and two former chairmen of the fed |
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Definition
| Ben Bernanke, Alan Greenspan, Paul Volcker |
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Term
| When was the Fed created? |
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Definition
| in 1913 during the progressive era |
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Term
| Current president of the Boston District Bank |
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Definition
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Term
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Definition
| Wrench: the interest rate the FED charges banks to borrow its money. When the Fed issues a high discount rate, it discourages banks from borrowing, which will contract the money supply (and vice versa) |
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