Shared Flashcard Set

Details

Title

CH 14

Description

Monetary Policy

Total Cards

Subject

Economics

Level

Undergraduate 3

Created

11/18/2007

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Additional Economics Flashcards

Term

Monetary Policy

Definition

running the country by adjusting money

Term

Discount rate

Definition

rate of interest charged by the Federal Reserve banks for lending reserves to private banks

Term

Federal Funds Rate

Definition

interest rate banks charge each other for reserve loans
*Ben Bernacke lowered it 1.25%
*Prime rate is 3 pts over fed funds rate

Term

Open Market Operations

Definition

Federal Reserve purchases and sales of govt bonds for the purpose of altering bank reserves

Term

Monetary Theories

Definition

1. Classical Theory- supply & demand
2. Keynes- spend when times are bad
3. Milton Freedman- If you can control $, you can control economy