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6 terms

macroeconomics chapter 26

Hubbard and O'Brien textbook
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monetary policy
The actions the Federal Reserve takes to manage the money supply and interest rates to pursue macroeconomic policy objectives.
federal funds rate
the interest rate banks charge each other for overnight loans
expansionary monetary policy
The Federal Reserve's increasing the money supply and decreasing interest rates to increase real GDP.
contractionary monetary policy
the federal reserve's adjusting the money supply to increase interest rates to reduce inflation
Taylor rule
a rule developed by John Taylor that links the feds target for the federal funds rate to economic variables
inflation targeting
conducting monetary policy so as to commit the central bank to achieving a publicly announced level of inflation