Term
|
Definition
| An item that buyers give to sell when they want to purchase goods and services |
|
|
Term
|
Definition
| An economy that does not interact with other economies in the world |
|
|
Term
|
Definition
| The purchase and sale of U.S. government bonds by the FED |
|
|
Term
|
Definition
| The costs of changing prices |
|
|
Term
| Federal Reserve (FED) (16) |
|
Definition
| The central bank of the US |
|
|
Term
|
Definition
| An institution designed to oversee the banking system and regulate the quantity of money in the economy |
|
|
Term
|
Definition
| A decrease in the value of a currency as measured by the amount of foreign currency it can buy |
|
|
Term
| Fractional-Reserve Banking (16) |
|
Definition
| A banking system in which banks hold only a fraction of deposits as reserves |
|
|
Term
| Reserve Requirements (16) |
|
Definition
| Regulations on the minimum amount of reserves that banks must hold against deposits |
|
|
Term
|
Definition
| Balances in bank accounts that depositors can access on demand by writing a check |
|
|
Term
|
Definition
| An excess of exports over imports |
|
|
Term
|
Definition
MxV = PxY
Increase in quantity of money is reflected in one of these variables
- price level rising
- quantity of output must rise
- velocity of money falls |
|
|
Term
|
Definition
| The fraction of deposits that banks hold as reserves |
|
|
Term
|
Definition
| Variables measured in physical units |
|
|
Term
|
Definition
|
|
Term
|
Definition
| The purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners |
|
|
Term
|
Definition
| An economy that interacts freely with other economies around the world |
|
|
Term
|
Definition
| The interest rate at which banks make overnight loans to one another |
|
|
Term
|
Definition
| An excess of imports over exports |
|
|
Term
|
Definition
| The resources wasted when inflation encourages people to reduce their money holdings |
|
|
Term
| Purchasing Power Parity (18) |
|
Definition
| A theory of exchange rates where by a unit of any given currency should be able to buy the same quantity of goods in all countries |
|
|
Term
|
Definition
| Money that takes the form of a commodity with intrinsic value |
|
|
Term
|
Definition
| The theoretical seperation of nominal and real variables |
|
|
Term
|
Definition
| The one-for-one adjustment of the nominal interest rate to the inflation rate |
|
|
Term
|
Definition
| Variables measured in monetary units |
|
|
Term
|
Definition
| Money given value by the gov |
|
|
Term
| Nominal Exchange Rate (18) |
|
Definition
| The rate at which a person can trade the currency of one country for the currency of another |
|
|
Term
|
Definition
| An item that people can use to transfer purchasing power from the present to the future |
|
|
Term
|
Definition
| The setting of the money supply by policymakers in the central bank |
|
|
Term
|
Definition
| The amount of money the banking system generates with each dollar of reserves |
|
|
Term
|
Definition
| An increase in the value of a currency as measured by the amount of foreign currency it can buy |
|
|
Term
|
Definition
| The interest rate on the loans that the FED makes to banks |
|
|
Term
|
Definition
| The yardstick people use to post prices and record debts |
|
|
Term
|
Definition
| Deposits that banks have recieved but have not loaned out |
|
|
Term
|
Definition
| The ease with which an asset can be converted into the economy's medium of exchange |
|
|
Term
|
Definition
| The revenue the government raises by creating money |
|
|
Term
|
Definition
| The rate at which a person can trade the goods and services of one country for the goods and services of another |
|
|
Term
|
Definition
| The rate at which money changes hands |
|
|
Term
|
Definition
| The value of a nation's exports minus the value of its imports; also called the trade balance |
|
|
Term
|
Definition
| The quantity of money available in the economy |
|
|
Term
|
Definition
| The proposition that changes in the money supply do not affect real variables |
|
|
Term
| Quantity Theory of Money (17) |
|
Definition
| A theory asserting that the quantity of money available determines the price level and that the growth rate in the quantity of money available determines the inflation rate |
|
|
Term
|
Definition
| A government policy that directly influences the quantity of goods and services that a country imports or exports |
|
|
Term
|
Definition
| A large and sudden reduction in the demand for assets located in a country |
|
|
Term
| Model of Aggregate Demand and Aggregate Supply (20) |
|
Definition
| The model that most economists use to explain short-run fluctuations in economic activity around its long-run trend |
|
|
Term
| Aggregate Demand Curve (20) |
|
Definition
| A curve that shows the quantity of goods and services that households, gov, firms, and consumers abroad want to buy at each price level |
|
|
Term
| Aggregate Supply Curve (20) |
|
Definition
| A curve shows the quantity of goods and services that firms choose to produce and sell at each price level |
|
|
Term
| Natural Rate of Output (20) |
|
Definition
| The production of goods and services that an economy achieves in the long run when unemployment is at its normal rate |
|
|
Term
|
Definition
| A period of falling output and rising prices |
|
|
Term
| Theory of Liquidity Preference (20) |
|
Definition
| Keyene's theory that interets rate adjusts to bring money supply and money demand into balance |
|
|
