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MacroEcon Ch15 - Monetary Policy

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the speed with which money circulates through the economy; calculated as the nominal GDP divided by the money supply.
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Terms in this set (17)
the speed with which money circulates through the economy; calculated as the nominal GDP divided by the money supply.
velocity.
the percentage amount of its total deposits that a bank is legally obligated to to either hold as cash in their vault or deposit with the central bank.
reserve requirement.
the purchase of long term government and private mortgage-backed securities by central banks to make credit available in hopes of stimulating aggregate demand
quantitative easing (QE).
the central bank selling or buying Treasury bonds to influence the quantity of money and the level of interest rates.
open market operations.
a monetary policy that increases the supply of money and the quantity of loans.
loose monetary policy.
an institution that provides short-term emergency loans in conditions of financial crisis.
lender of last resort.
a rule that the central bank is required to focus only on keeping inflation low.
inflation targeting.
the interest rate at which one bank lends funds to another bank overnight.
federal funds rate.
a monetary policy that increases the supply of money and the quantity of loans.
expansionary monetary policy.
reserves banks hold that exceed the legally mandated limit.
excess reserves.
the interest rate charged by the central bank on the loans that it gives to other commercial banks.
discount rate.
an insurance system that makes sure depositors in a bank do not lose their money, even if the bank goes bankrupt.
deposit insurance.
moving in the opposite direction of the business cycle of economic downturns and upswings.
countercyclical.
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a monetary policy that reduces the supply of money and loans.
contractionary (tight) monetary policy.
institution which conducts a nation's monetary policy and regulates its banking system.
central bank.