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Monetary Policy Government policy that attempts to manage the economy by controlling the money supply and thus interest rates. Fiscal Policy The federal government efforts to keep the economy stable by increasing or decreasing taxes or government spending. Savings Bond Bonds issued by the federal government as a way of borrowing money; they are purchased at half the face value and increase every 6 months until full face value is due. Tariff Tax on imported goods. Federal Reserve The central bank of the United States. Discount Rate Rate the Federal Reserve charges for loans to commercial banks. Open Market Operations The purchase and sale of U.S. government bonds by the Fed. Reserve Requirement This is the percentage of their deposits that member banks must keep available in a Federal Reserve Bank. Trade Deficit Country imports more than it exports. Trade Surplus Country exports more than it imports. Protectionism Protecting domestic manufacturers from foreign competition by imposing tariffs and quotas on imported goods. Inflation A continuous rise in the price of goods and services. Deflation A contraction of economic activity resulting in a decline of prices. Gross Domestic Product The sum total of the value of all the goods and services produced in a nation. Consumer Price Index A measure of the overall cost of the goods and services bought by a typical consumer.