econ

Question 0

reserve requirements

Answer 0

set aside a certain percentage, or fraction of each deposit as legal reserves

Question 1

the fed established in?

Answer 1

1913

Question 2

legal reserves

Answer 2

the coin and currency held in bank vaults

Question 3

assests-

Answer 3

the valuable things they own

Question 4

liabilities

Answer 4

debts

Question 5

balance sheet

Answer 5

.

Question 6

liquidity

Answer 6

they can be changed quickly to cash if needed

Question 7

short run

Answer 7

when the feds monetary policies affects or changes the interests rates and price people and businesses pay to borrow money. fed lets the money supply increase, the cost of credit goes down. if the money supplies decreases, the cost of credit(the interest rate) goes up.

Question 8

prime rate

Answer 8

the interest rate that commercail banks charge their best cutomers

Question 9

long term

Answer 9

.

Question 10

quantity theory of money

Answer 10

changes in money supply affect the general level of prices

Question 11

monetize the debt

Answer 11

create enough extra money to offset the governments deficit spending

Question 12

when feds decide on monetray policy has to consider issues

Answer 12

1. how long policy will take to show results
2. what part of the economy will be affected most
3. changes in interest rates may determine whether people buy now or in the future