Term
| reasons why aggregate demand curve is downward sloping |
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Definition
| wealth effect, interest rate effect, & net export effect |
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Term
| change in the price level affects consumption |
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Definition
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Term
| change in price level affects investment |
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Definition
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Term
| actions the Fed Res takes to manage the money supply and interest rates to pursue macroeconomic policy objectives |
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Definition
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Term
| changes in federal taxes & spending that are intended to achieve macroeconomic policy objectives such as high employment, price stability & economic growth |
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Definition
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Term
| when aggregate demand meets aggregate supply = |
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Definition
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Term
| anything that serves as medium of exchange, unit of account & store of value |
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Definition
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Term
| primary function of money; is widely accepted in exchange for goods & services |
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Definition
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Term
| should provide common measurement of relative value of goods |
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Definition
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Term
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Definition
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Term
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Definition
1. completely liquid
2. portable & divisible
3. uniform |
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Term
| anything that serves as money while having market value in other use (ex. gold or silver used as exchange and used as jewelry) |
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Definition
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Term
| money accepted by law for both private & public debt |
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Definition
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Term
| the narrowest definition of money supply. includes currency, traveler's checks & checkable deposits |
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Definition
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Term
| definition of money supply that ='s M1 plus near monies, such as savings deposits & small time deposits less than $100,000 |
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Definition
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Term
| definition of money supply that ='s M2 plus large time deposits of $100,000 or more |
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Definition
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Term
| deposit that a bank keeps as cash in its vault or on deposit w/ Fed Res. |
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Definition
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Term
| minimum balance that the fed requires a bank to hold cash in or on deposit w/ Fed |
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Definition
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Term
| % of deposits that Fed requires bank to hold in the cash vault or on deposit w/ the Fed |
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Definition
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Term
| potential loan balances held in vault cash or deposited w/ Fed in excess of the required reserves |
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Definition
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Term
| multiplies chackable deposit |
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Definition
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Term
| depositors simutaneously decide to withdraw money from a bank |
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Definition
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Term
| many banks experience runs at the same time |
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Definition
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Term
| interest rate the Fed Res charges on discount loans |
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Definition
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