Term
|
Definition
| use of government purchases, taxes, and transfer payments to alter equilibrium output and prices. |
|
|
Term
|
Definition
| occurs when government spending excceds tax revenues for a given fiscal year. |
|
|
Term
|
Definition
| occurs when tax revenues are greater than government expenditures for a given fiscal year. |
|
|
Term
| Expansionary fiscal policy |
|
Definition
| use of fiscal policy tools to reduce output by decreasing government purchases, increasing taxes, and/or reducing transfer payments. |
|
|
Term
| Contractionary fiscal policy |
|
Definition
| Use of fiscal policy tools to reduce output by decreasing government purchases, increasing taxes, and/or reducing transfer payments. |
|
|
Term
|
Definition
| a chain raction of additional income and purchases that results in total purchases that are greater than the initial increase in purchases. |
|
|
Term
| Marginal propensity to consume |
|
Definition
| the additional consumption resulting from an additional dollar of disposable income. |
|
|
Term
| Marginal propensity to save |
|
Definition
| the change in savings divided by the change in disposable income. |
|
|
Term
|
Definition
|
|
Term
|
Definition
| theory that government borrowing drives up the interest rate, lowering consumption by households and investment spending by firms. |
|
|
Term
|
Definition
| changes in government transfer payments or tax collections that automatically help counter business cycle fluctuations. |
|
|
Term
|
Definition
| Government Spending>Tax Revenues |
|
|
Term
|
Definition
| Tax Revenues>Government Spending |
|
|
Term
|
Definition
| Anything generally accepted in exchange for goods and services |
|
|
Term
|
Definition
| the primary function of money, which is to facilitate transactions and lower transaction costs |
|
|
Term
|
Definition
| direct exchange of goods and services without the use of money. |
|
|
Term
| Means of deferred payment |
|
Definition
| the attricute of money that makes it easier to borrow and to repay loans. |
|
|
Term
|
Definition
| coins and/or paper created to facilitate the trade of goods and services and the payment of debts. |
|
|
Term
|
Definition
| coins and paper officially declared to be acceptable for the settlement of financial debts. |
|
|
Term
|
Definition
| a means of exchange established by government declaration. |
|
|
Term
|
Definition
| balances in bank accounts that depositors can access on demand. |
|
|
Term
|
Definition
| deposits that can be easily converted to currency or used to buy goods and services directly. |
|
|
Term
|
Definition
| transaction instruments easily convertible into currency. |
|
|
Term
|
Definition
| funds that cannot be used for payment directly but must be converted into currency for general use. |
|
|
Term
|
Definition
| nontransaction deposits that are not money but can be quickly converted into money. |
|
|
Term
| Money Market mutual funds |
|
Definition
| interest-earning accounts provided by brokers that pool funds into such investments as Treasury bills. |
|
|
Term
|
Definition
| the ease with which one asset can be converted into another asset or into goods and services |
|
|
Term
|
Definition
| the narrowest definition of money; includes currency, checkable deposits, and traveler's checks. |
|
|
Term
|
Definition
| a broader definition of money that includes M1 plus savings deposits, time deposits, and noninstitutional money market mutual fund shares. |
|
|
Term
|
Definition
| defining the dollar as equivalent to a set value of a quantity of gold, allowing direct converitibility from currency to gold. |
|
|
Term
|
Definition
| the principle that "cheap money drives out dear money"; given an alternative, people prefer to spend less valuable money. |
|
|
Term
|
Definition
| financial insitutions organized to handle everyday financial transactions of businesses and households through demand deposit accounts and savings accounts and by making short-term commercial and consumer loans. |
|
|
Term
| Savings and loan associations |
|
Definition
| financial institutions organized as cooperative associations that hold demand deposits and savings of members in the form of dividend-bearing shares and make loans, especially home mortgage loans. |
|
|
Term
|
Definition
| financial cooperatives made up of depositors with common affiliation. |
|
|
Term
|
Definition
| holdings of assets at the bank or at the Federal Reserve Bank as mandated by the Fed. |
|
|
Term
| fractional reserve system |
|
Definition
| a system that requires banks to hold reserves equal to some fraction of their checkable deposits. |
|
|
Term
|
Definition
| highly liquid, interest-paying assets held by the bank. |
|
|
Term
|
Definition
| a financial record that indicates the balance between a bank's assets and its liabilities plus capital. |
|
|
Term
|
Definition
| the percentage of deposits that a bank must hold at the Federal Reserve Bank or in bank vaults. |
|
|
Term
|
Definition
| reserve levels held above that required by the Fed |
|
|
Term
|
Definition
| measures the potential amount of money that the banking system generates with each dollar of reserves. |
|
|
Term
|
Definition
| purchase and sale of government securities by the Federal Reserve System. |
|
|
Term
|
Definition
| interest rate that the Fed charges commercial banks for the loans it extends to them. |
|
|
Term
|
Definition
| market in which banks provide short-term loans to other banks that need cash to meet reserve requirements. |
|
|
Term
|
Definition
| Market in which money demand and money supply determine the equilibrium interest rate. |
|
|
Term
|
Definition
| a measure of how frequentily money is turned over. |
|
|
Term
| Quanitity theory of money and prices |
|
Definition
| a theory of the connection between the money supply and the price level when the velocity of money is constant. |
|
|
Term
|
Definition
| occurs when a person or country can produce a good or service at a lower opportunity cost than others. |
|
|
Term
|
Definition
| a legal limit on the imported quantity of a good that is produced abroad and cna be sold in domestic markets. |
|
|
Term
|
Definition
| efforts by producers to gain profits from government protections such as tariffs and import quotas |
|
|
Term
|
Definition
| the record of international transactions in which a nation has engaged over a year |
|
|
Term
|
Definition
| a record of a country's imports and exports of goods and services, net investment income, and net transfers. |
|
|
Term
|
Definition
| records the foreign purchases or assets in the domestic economey and domestic purchases of assets abroad. |
|
|
Term
|
Definition
| The price of oue unit of a country's currency in terms on another country's currency. |
|
|
Term
|
Definition
| the demand for an input derived from consumers' demand for the good or service produced with that input. |
|
|
Term
|
Definition
| a description of the exchange rate system that means that fluctuations in currency values are partly determined by government intervention. |
|
|
