Exam (elaborations)
ECON 3020 TEST 2 Chapter 13,14,15 Questions answers latest update
- Course
- ECON 3020
- Institution
- University Of Virginia
ECON 3020 TEST 2 Chapter 13,14,15 Questions answers latest update
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ECON 3020 TEST 2 Chapter 13,14,15Federal Funds Rate - Target interest rate for overnight bank loans.
FOMC - Federal Open Market Committee; sets federal funds rate.
Monetary Base - Total amount of money in the economy.
Required Reserves - Minimum reserves banks must hold by law.
Excess Reserves - Reserves held beyond the required minimum.
Money Supply - Total amount of money available in the economy.
Supply of Reserves - Controlled by the Federal Reserve's policies.
Demand for Reserves - Depends on reserve requirements and federal funds rate.
Opportunity Cost - Cost of holding reserves instead of lending.
, Demand Curve - Graph showing relationship between demand and federal funds
rate.
Perfectly Inelastic Demand - Demand remains constant regardless of price
changes.
Interest on Reserves (IOR) - Interest paid by Fed on required and excess reserves.
Open Market Operations (OMO) - Buying/selling government securities to control
money supply.
Discount Window - Facility where banks borrow reserves from the Fed.
Discount Rate - Interest rate charged by Fed for borrowed reserves.
Perfectly Elastic Supply - Supply remains constant despite changes in demand.
Vertical Supply Curve - Indicates fixed supply regardless of interest rate.
Horizontal Demand Curve - Indicates constant demand at a specific interest rate.
Bank Penalties - Fines for failing to meet reserve requirements.
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