Chapter 20 - Money, price & financial intermediaries

________: all the assets in M1 plus some additional assets that are usable in making payments but at greater cost or inconvenience than currency or checks.

________: firms that extend credit to borrowers using funds raised from savers.

________: asset used in purchasing goods and services.

________: direct trade of goods or services for other goods /services.

________: sum of currency outstanding and balances held in checking accounts.

________: determination of the nation's money supply.

________: measure of the speed at which money changes hands in transactions involving final goods and services, or, equivalently, nominal GDP divided by the stock of money.

________: money times velocity equals nominal GDP.

________: basic measure of economic value.

firms that extend credit to borrowers using funds raised from savers

any asset that can be used in making purchases

asset used in purchasing goods and services

direct trade of goods or services for other goods/services

basic measure of economic value

asset that serves as a means of holding wealth

sum of currency outstanding and balances held in checking accounts

all the assets in M1 plus some additional assets that are usable in making payments but at greater cost or inconvenience than currency or checks

cash or similar assets held by commercial banks for the purpose of meeting depositor withdrawals and payments

situation in which banks' reserves equal 100 percent of their deposits

bank reserves divided by deposits

banking system in which bank reserves are less than deposits so that the reserve-deposit ratio is less than 100 percent

central bank of the United States

determination of the nation's money supply

purchase of government bonds from the public by the Fed for the purpose of increasing the supply of bank reserves and the money supply

sale by the Fed of government bonds to the public for the purpose of reducing bank reserves and the money supply

open-market purchases and open-market sales

measure of the speed at which money changes hands in transactions involving final goods and services, or, equivalently, nominal GDP divided by the stock of money

money times velocity equals nominal GDP

Firms that extend credit to borrowers using funds raised from savers

Any asset that can be used in making purchases

Asset used in purchasing goods and services

Direct trade of goods or services for other goods/services

Basic measure of economic value

Asset that serves as a means of holding wealth

Sum of currency outstanding and balances held in checking accounts

All the assets in M1 plus some additional assets that are usable in making payments but at greater cost or inconvenience than currency or checks

Cash or similar assets held by commercial banks for the purpose of meeting depositor withdrawals and payments

Situation in which banks' reserves equal 100% of their deposits

Bank reserves divided by deposits

Banking system in which bank reserves are less than deposits so that the reserve-deposit ratio is less than 100%

Central bank of the United States

Determination of the nation's money supply

Purchase of government bonds from the public by the Fed for the purpose of increasing the supply of bank reserves and the money supply

Sale by the Fed of government bonds to the public for the purpose of reducing bank reserves and the money supply

Open-market purchases and open-market sales

Measure of the speed at which money changes hands in transactions involving final goods and services, or, equivalently, nominal GDP divided by the stock of money

Money times velocity equals nominal GDP