Economics U2
Usury
the practice of lending money at exorbitant rates
Board of Governors
the seven-member board that oversees the Federal Reserve System
unit of account
An agreed-upon measure for stating the prices of goods and services
medium of exchange
Any item sellers generally accept and buyers generally use to pay for a good or service; money; a convenient means of exchanging goods and services without engaging in barter.
balanced budget
Budget in which revenues are equal to spending
M2
M1 plus savings accounts, certificates of deposit, and other liquid assets
discount rate
The interest rate on the loans that the Fed makes to banks
natural monopoly
a competitive advantage not legally or purposefully created
pursuit of profit
a component of a free enterprise system that creates incentive for business owners to provide products and services.
startup
a new company started by an entrepreneur
discretionary fiscal policy
a policy created by congress
automatic fiscal policy
a policy created in response to the economy
collusion
a situation in which competitors work together to artificially set prices
budget deficit
a situation in which the government spends more than it takes in
budget surplus
a situation in which the government takes in more than it spends
oligopoly
an industry with few competitors and high entry barriers
central bank
an institution that manages the the supply of money in the economy
cartel
an international monopoly
legal monopoly
competitive advantage created or protected by law
monopoly
complete control over a product or market with little or no competition
perfect competition
creates a large market with many options for the consumers
expansionary fiscal policy
increases aggregate demand
thrift institutions
mutual savings banks, S&Ls, and credit unions that offer many of the same services as commercial banks
contractionary fiscal policy
reduction of government spending combined with raising the taxes
competition
rivals that deal in similar products or services
open market operations
the buying and selling of government securities to alter the supply of money
dollar gold convertibility
the circulation of dollars backed by gold reserves
required reserve ratio
the fraction of deposits that banks are required to keep in reserve
chair
the head of the board of governors of the federal reserve system
FOMC (Federal Open Market Committee)
12 members. 7 board members, 1 pres, 4 other
fiscal policy
A government policy for dealing with the budget (especially with taxation and borrowing)
M1
currency, demand deposits, traveler's checks, and other checkable deposits
New York Federal Reserve
implements monetary policy
store of value
something that keeps its value if it is stored rather than used