Term
| Contractionary monetary policy |
|
Definition
| The Federal Reserve's increasing interest rates to reduce inflation |
|
|
Term
| Expansionary monetary policy |
|
Definition
| The Federal Reserve's decreasing interest rates to increase real GDP |
|
|
Term
|
Definition
| The interest rate banks charge each other for overnight loans |
|
|
Term
|
Definition
| Conducting monetary policy so as to commit the central bank to achieving a publicly announced level of inflation |
|
|
Term
|
Definition
| The actions the Federal Reserve takes to manage the money supply and interest rates to pursue macroeconomic policy goals |
|
|
Term
|
Definition
| A rule developed that links the Fed's target for the federal funds rate to economic variables |
|
|
Term
| Two main monetary policy targets |
|
Definition
| Money supply and interest rate |
|
|
Term
|
Definition
| is concerned with the long-term real rate of interest |
|
|
Term
|
Definition
| is concerned with the short-term nominal rate of interest |
|
|
Term
| long-run real rate of interest |
|
Definition
| the interest rate that is relevant when savers consider purchasing a long-term financial investment such as a corp. bond |
|
|
Term
| short-term nominal interest rate |
|
Definition
| Most relevant interest rate when conducting monetary policy because it is the interest rate most affected by increases and decreases in the money supply |
|
|
Term
|
Definition
| loans granted to borrowers with flawed credit histories |
|
|
Term
| adjustable-rate mortgages |
|
Definition
| allowed borrowers to pay a very low interest rate for the first few years of the mortgage and a higher rate in later years |
|
|
Term
|
Definition
| firms that participate in regular open market transactions with the fed |
|
|
Term
|
Definition
| The possibility that managers of firms might make riskier investments if they believe the federal government will save them from bankruptcy |
|
|
Term
| Troubled Asset Relief Program (TARP) |
|
Definition
| passed by congress 2008, under which the treasury attempted to stabilize the commercial banking system by providing funds in exchange for stock |
|
|
