The Fed Vocabulary Flashcard

Front

Monetary policy is primarily concerned with: Regulating the money supply and interest rates, Controlling government spending and taxation, Managing international trade agreements, Overseeing labor laws and employment standards

Back

Regulating the money supply and interest rates

Front

The Federal Advisory Council is a group that provides advice to which of the following entities? The United States Congress, The Federal Reserve Board, The Department of Treasury, The White House

Back

The Federal Reserve Board

Front

The Federal Open Market Committee is responsible for what aspect of the Federal Reserve's operations?

Back

Setting interest rates

Front

What is the Federal Funds Rate?

Back

The interest rate at which depository institutions lend reserve balances to other depository institutions overnight

Front

The Discount rate is:

Back

The interest rate charged by central banks on loans to commercial banks

Front

Money creation is the process by which:

Back

Banks increase the money supply through lending.

Front

What is the Reserve Requirement?

Back

A percentage of deposits that banks must hold in reserve and not lend out.

Front

The Prime Rate is:

Back

The interest rate that commercial banks charge their most creditworthy customers.

Front

Open market operations are a tool used by central banks to control the money supply. Which of the following best describes open market operations? Buying and selling government securities in the open market, Setting the interest rates for commercial banks, Regulating the reserve requirements for banks, Issuing new currency notes

Back

Buying and selling government securities in the open market

Front

Monetarism is a school of thought that emphasizes the role of what in controlling inflation and economic stability?

Back

Money supply