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Definition
| the set of assets that people regularly use to buy g&s from other people |
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Definition
| an item buyers give to sellers when they want to purchase g&s |
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Definition
| the yardstick people use to post prices and record debt |
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Definition
| an item people can use to transfer purchasing power from the present to the future |
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Definition
takes the form of a commodity with intrinsic value
Examples: gold coins, cigarettes in POW camps |
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Definition
money without intrinsic value, used as money because of govt decree
Example: the U.S. dollar |
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Term
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Definition
| the quantity of money available in the economy |
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Definition
| the paper bills and coins in the hands of the (non-bank) public |
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Definition
| balances in bank accounts that depositors can access on demand by writing a check |
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Definition
| an institution that oversees the banking system and regulates the money supply |
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Definition
| the setting of the money supply by policymakers in the central bank |
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Definition
| the central bank of the U.S. |
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Definition
| (7 members), located in Washington, DC |
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Term
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Definition
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Term
| Federal Open Market Committee (FOMC) |
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Definition
| includes the Bd of Govs and presidents of some of the regional Fed banks. Decides monetary policy. |
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Term
| fractional reserve banking system |
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Definition
banks keep a fraction of deposits as reserves
and use the rest to make loans |
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Term
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Definition
| regulations on the minimum amount of reserves that banks must hold against deposits |
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Term
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Definition
= fraction of deposits that banks hold as reserves
= total reserves as a percentage of total deposits |
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Term
| In a 100% reserve banking system |
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Definition
| banks do not affect size of money supply |
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Term
| A fractional reserve banking system |
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Definition
| creates money, but not wealth |
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Term
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Definition
| The amount of money the banking system generates with each dollar of reserves |
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Term
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Definition
| the resources a bank obtains by issuing equity to its owners |
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Term
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Definition
| the use of borrowed funds to supplement existing funds for investment purposes |
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Term
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Definition
| the ratio of assets to bank capital |
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Term
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Definition
| a govt regulation that specifies a minimum amount of capital, intended to ensure banks will be able to pay off depositors and debts. |
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Term
| Open-Market Operations (OMOs) |
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Definition
| the purchase and sale of U.S. government bonds by the Fed |
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Term
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Definition
| he interest rate on loans the Fed makes to banks—to influence the amount of reserves banks borrow |
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Term
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Definition
| regulations on the minimum amount of reserves banks must hold against deposits. |
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Term
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Definition
| The interest rate on loans |
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