Upgrade to remove ads
Exam 3 Econ
Terms in this set (43)
any commodity or token that is generally accepted as a means of payment.
any object that we decide is money (according to some law).
currency + traveler's checks + checkable deposits
M1 + savings deposits + time deposits + money market funds + other deposits
are not money. They are "instructions" to banks to make a payment of money.
are not money. It's basically an ID card that gets you an instant loan.
are like checks. You swipe it and it sends an instruction to your bank to make a payment
when u buy something using your phone or tablet, using your credit card or debit card stored information. So it's not money either (same as credit card or debit card).
a form money (but only when/if it becomes "generally accepted" everywhere. Right now it's not there yet).
J.P. Morgan Chase
Top U.S. Bank (2.62 Trillion)
Top Bank Worldwide (4 trillion)
the currency in the bank's vault, plus the balance on its reserve account at the Federal Reserve
Liquid Assets (Less Than %1)
"short-term Treasury bills and overnight loans to other banks." Commercial banks may lend each other money, at an interest rate known as the "Federal Funds Rate"
"bonds issued by the US gov't and other organizations." Safest way to guarantee profiting.
The money that banks lend to businesses and individuals (and expect them back after a certain amount of time with interest). Highest risk, but also highest profits.
is "a debt instrument with a promise to pay back the money with interest." It's basically an "I owe you" note. You give me a bond, and I give you cash, and you promise to pay me back with interest with a deadline (maturity date).
A stock is share of ownership of a company. When you purchase a stock, or a number of stocks, then you own a portion of the company that the stock represents. And when the company profits, you get a "share" of that profit, known as "dividend."
is like a smaller bank but owned by a social or economic group, such as a firm's employees. And like a bank, it accepts savings deposits and gives out loans (mostly to consumers, not businesses). Unlike a commercial bank, by opening an account at a credit union, you become a partner (owner), and when the credit union makes a profit, it is distributed on the owners (members).
money market fund
"a financial institution that obtains funds (money) by selling shares, then uses these funds to buy assets such as US Treasury bills."
Central bank of America
public authority that provides banking services only to banks and governments (not individuals or businesses) and regulates financial institutions and markets.
The Chair of the Board of Governors
The Chair of the Board of Governors is the Fed's CEO and public face
The Board of Governors
Made of seven members (including the Chair), all appointed by the president of the US and confirmed by the Senate, each for a 14-year term. Chair term is 4 years, but can be renewed.
The regional Federal Reserve Banks
there are 12 of them (one for each district). The one in NY has a special status.
The Federal Open Market Committee (FOMC)
this is the Fed's main policy-making committee. It consists of the following 12 people:The 7 board of governors (chair included) + President of the Federal Reserve Bank in NY + 4 presidents of other regional federal reserve banks (rotate yearly).
increases in the price level (inflation) resulting from an excess of demand over output at the existing price level, caused by an increase in aggregate demand
When prices rise due to an increase in the cost of production.
A very rapid rise in the price level; an extremely high rate of inflation.
the wage measured in current dollars; the dollar amount on a paycheck
to achieve both stable prices (i.e. keep inflation low) and maximum employment (i.e. full employment at potential GDP level of production).
Required Reserve Ratio
is the amount of currency that banks are required by the Fed to keep in their vaults (or in their accounts at the Fed).
is the interest rate that the Fed charges banks when it lends money to them.
Open Market Operations
is when the Fed buys or sells government securities (bonds, T-bills, etc.)
the federal budget
is "an annual statement of the tax revenues, outlays, and surplus or deficit of the government." In other words, it's "the government's estimate of revenue and spending for each fiscal year."
is "the use of the federal budget to achieve macroeconomic objectives.
Which includes Social Security, Medicare, Medicaid, Unemployment benefits, Veterans' benefits, food & agriculture, other benefits (and entitlements) paid to individuals and firms.
Expenditure on Goods & Services,
which includes military and security (57%), education, health care, transportation, science, energy & environment, international affairs
to achieve both stable prices (i.e. keep inflation low) and maximum employment (i.e. full employment at potential GDP level of production)
Refers to a foreign firm selling its exports at a price lower than its own cost of production - hence the term: "dumping" their products.
a firm wants to destroy its competitors (run them out of business) by purposefully selling their products at a price below cost of production. Even though they are losing money in the short-run, by driving their foreign competitors out of business, they'll end up taking over a greater market share.
a firm may be receiving incredibly high subsidies from the government, which gives allows them to sell at below-cost prices.
An amount of money per unit produced, paid by the government to the producer
A restriction on the quantity allowed to be imported of a certain product within a given time period.
YOU MIGHT ALSO LIKE...
Economics Ch 14, 15, 16
ECON 104 Chapter 14
Price Module Macro
Econ 202 Midterm 2 Chapter 8
OTHER SETS BY THIS CREATOR
US History: 1302 with Dr.Stephens at Blinn
Physical Geography Exam 2
History Exam 1