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Economics
Chapter 15:1, 2, and 3
| Question | Answer |
|---|---|
| Interest rate that the Fed charges on loans to members banks | Discount rate |
| Rate of interest that banks charge on loans to their best business customers | Prime rate |
| Interest rate that banks charge each other on loan (usually overnight) | Federal funds rate |
| Buying and selling of United States securities by the Fed to affect the money supply | Open-market operations |
| ___________ is a chairman of the Federal Reserve board and he helped out society because he monitors developments in the United States economy | Alan Greenspan |
| For a Loose money policy, it is easy to _______, and the consumers will buy ____, Businesses ________, more people are ______,and people will ______ more often | a)Borrow b)More c)Expand d)Employed e)Spend |
| In a tight money policy, borrowing money is _______, consumers buy ______, businesses postpone ________, unemployment ________, and production is _______ | a)Difficult b)Less c)Expansion d)Increases e)Reduced |
| Clearing checks, acting as Fed governement's fiscal agent, Supervising member banks, Holding reserves and setting reserve requirements, Supplying paper currency, and Regulating the money supply | Functions of the Fed |
| Monetary policy that makes credit inexpensive and abundant, possibly leading to inflation | Loosing money policy |
| Monetary policy taht makes credit expensive and in short supply in an effort to slow the economy | Tight money policy |
| System in which only a fraction of the deposits in a bank is kept on hand, or in reserve; the remainder is available to lend | Fractional reserve banking |
| Regulations set by the Fed requiring banks to keep a certain percentage of their deposits as cash in their own vaults or as deposits in their Federal Reserve District Bank | Reserve requirements |
| The Federal Reserve System created by Congress in 1913 as the nation's central banking organization | Fed |
| Policy that invovles changing the rate of growth of the supply of money in circulation in order to affect the cost and avaiability of credit | Monetary policy |
| 12-member committee in the Federal Reserve System that meets 8 times a year to decide the course of action that the Fed should take to control the money supply. | Federal Open Market Committee |
| Method by which a check that has been deposited in one institution is transferred to the issuer's depository instition | Check Clearing |
| Business Investment, Government Activity, Psychological Factors, and External Factors | Business Fluctuations |
| Ch.13.5: Inventions and new production techniques | Innovations |
| Statistics that measure variables in the economy | Economic Indicators |
| Statisics that point to what will happen in the economy | Leading Indicators |
| Economic indicators that that usually change at the same time as changes in overall business activity | Coincident indicators |
| Indicators that seem to lag behind changes in overall business activity | Lagging indicatiors |
Created by:
Hayley01
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