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Definition
| Synonymous with money, money stock, money holdings. |
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Term
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Definition
| Holding money as a medium of exchange to make payments. The level varies directly with nominal GDP. |
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Term
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Definition
| Holding money to meet unplanned expenditures and emergencies. |
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Term
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Definition
| Holding money as a store of value instead of other assets such as corporate bonds and stocks. |
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Term
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Definition
| The formula indicating that the number or monetary units (Ms) times the number of times each unit is spent on final goods and services (V) is identical to the price level (P) times real GDP (Y). |
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Term
| income velocity of money (V) |
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Definition
| The number of times per year a dollar is spent on final goods and services; identically equal to nominal GDP divided by money supply. |
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Term
| quantity theory of money and prices |
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Definition
| The hypothesis that changes in the money supply lead to equiproportional changes in price level. |
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Term
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Definition
| A private market (made up mostly of banks) in which banks can borrow reserves from other banks that want to lend them. Federal funds are usually lent for overnight use. |
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Term
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Definition
| The interest rate that depository institutions pay to borrow reserves in the interbank federal funds market. |
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Term
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Definition
| The interest rate that the Federal Reserve charges for reserves that it lends to depository institutions. |
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Term
| What are two other names for discount rate? |
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Definition
| Rediscount rate and the bank rate. |
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Term
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Definition
| A document that summarizes the Federal Open Market Committee's general policy strategy, establishes near-term objectives for the federal funds rate, and specifies target ranges for money supply growth. |
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Term
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Definition
| An office at the Federal Reserve Bank of New York charged with implementing monetary policy strategies developed by the Federal Open Market Committee. |
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Term
| neutral federal funds rate |
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Definition
| A value of the interest rate on interbank loans at which the growth rate of real GDP tends neither to rise nor to fall relative to the rate of growth of potential, long-run, real GDP,given the expected rate of inflation. |
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Term
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Definition
| An equation that specifies a federal funds rate target based on an estimated long-run real interest rate,the current deviation of the actual inflation rate from the Federal Reserve's inflation objective, and the gap between actual GDP per year and a measure of potential real GDP per year. |
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