Exchange rate
________: The price at which currencies trade for one another in the market.
Bonds
________ are loans that are repaid with interest.
Stocks
________ are shares in the ownership of a corporation.
sale of US
Open Market Operations: The purchase or ________> government securities by the Fed.
Appreciation
________ of a currency: An increase in the value of a currency.
Depreciation
________ of a currency: A decrease in the value of a currency.
price level
The ________ and GDP affect money demand.
net exports
An increase in interest rates will reduce both investment spending (including consumer durables) and ________.
interest rates
A decrease in ________ will increase investment spending and net exports.
Discount Rate
________: The interest rate at which banks can borrow from the Fed.
Feds ultimate goal
The ________ is to change output by either slowing or speeding the economy by influencing aggregate demand.
Demand and Supply of Money
Quantitative Easing: Purchasing long- term securities 14.3 How Interest Rates Are Determined: Combining the ________ Interest Rates and Bond Prices.
Interest rates
________ affect money demands.
Money market
______________: The market for money in which the amount supplied and the amount demanded meet to determine the nominal interest rate.
Transaction demand for money
_______________________: The demand for money is based on the desire to facilitate transactions.
Principle of Opportunity Cost
_____________________: The opportunity cost of something is what you sacrifice to get it.