Ap Macro unit 4 and five

studied byStudied by 57 people
5.0(1)
get a hint
hint

Federal Funds rate

1 / 49

encourage image

There's no tags or description

Looks like no one added any tags here yet for you.

50 Terms

1

Federal Funds rate

the interest rate at which commercial banks make overnight loans to one another

New cards
2

Policy rate

the interest rate at which the central bank will lend money to commercial banks

New cards
3

real intrest rate equation

nominal interest rate - inflation rate

New cards
4

Expasionary fiscal policy

Decreasing taxes and increasing government spending

New cards
5

Contractionary Fiscal Policy

Increasing taxes and decreasing government spending

New cards
6

Expansionary Monetary Policy in a limited reserves system

The central bank buys bonds, decrease the reserve requirement, decrease the discount rate

New cards
7

Contractionary Monetary policy in a limited reserves system

The central bank sells bonds, increase the reserve requirement, increase the discount rate

New cards
8

expansionary monetary policy in an ample reserves system

decrease interest on reserves, decrease the discount rate, buy bonds

New cards
9

Contractionary monetary policy in an ample reserves system

increase interest on reserves, increase the discount rate, sell bonds

New cards
10

Discount rate

The rate that the central bank charges banks when they take loans from the central bank

New cards
11

Interest on reserves

The rate that a central bank will pay commercial banks foe holding their reserves in the central bank

New cards
12

Money supply model

knowt flashcard image
New cards
13

The y axis on the MS model

Nominal Interest rate

New cards
14

X-axis on the MS Model

quantity of Money

New cards
15

Money supply curve shifters

only the federal reserve can change the supply

New cards
16

Money demand curve shifters

a change in price level, RGDP, and transaction costs

New cards
17

Reserve market model

knowt flashcard image
New cards
18

The y axis of the Reserve market Model

Policy rate

New cards
19

X axis on the Reserve Market Model

Quantity of reserves

New cards
20

Vertical line on the reserve market model

Supply of reserves

New cards
21

Top horizontal line on the reserve market model

Discount Rate

New cards
22

Bottom horizontal line on the Reserve Market Model

Demand For reserves, the dotted line is Interest on reserves

New cards
23

Loanable funds market Model

knowt flashcard image
New cards
24

Y axis on the Loanable funds market Model

Real Interest Rate

New cards
25

X Axis on the Loanable Funds market Model

Quantity of loans

New cards
26

Downward sloping curve on Loanable funds rate model

demand for loans

New cards
27

upwards sloping curve on loanable funds rate mode

Supply of loanable funds

New cards
28

Loan demand shifters

change in private borrowing, change in public borrowing

New cards
29

Loan Supply Shifters

change in private savings, change in public savings

New cards
30

M1

Cash, Checking accounts, Travelers Checks

New cards
31

M2

Savings assets, Checking deposits, Money Market assets, +M1

New cards
32

Uses of money

Medium of exchange, unit of account, store of value

New cards
33

Recessionary gap on the Aggregate demand model

expansionary fiscal policy and monetary policy. Needs to increase the money supply and lower the nominal interest rate

New cards
34

Expansionary gap on the Aggregate Demand Model

contractionary fiscal policy and monetary policy. Need to decrease the money supply and increase the monetary policy

New cards
35

increase in money supply

decrease in nominal interest rate

New cards
36

decrease in money supply

increase in nominal interest rate

New cards
37

Short run Phillips curve shifter

a shift in ad results in movement along the curve, a shift in AS moves the SRPC in the opposite direction the shift occurred

New cards
38

Phillips curve model

knowt flashcard image
New cards
39

y axis for the phillps curve model

Inflation rate

New cards
40

x axis for the phillips curve model

unemployment rate

New cards
41

downward sloping line on the Phillips curve model

Short run phillips curve

New cards
42

upward sloping line on the philips curve model

long run phillips curve

New cards
43

stagflation

caused by a decrease in aggregate supply which results in an increase in unemployment and inflation along with slow economic growth

New cards
44

velocity of money (v)

the amount of times a dollar is respent in a year

New cards
45

Quantity of money theory

Money Supply (M) x Velocity (V) = Price level (P) x Quantity of Output (Y)

New cards
46

Nominal Gdp formula

Price level (P) x Quantity of Output (Y)

New cards
47

Crowding out

The government deficit spends increasing demand for loans because there is less taxes being collected or an increase in spending. Interest rates increase due to this which decreases private sector borrowing in the short run “Crowding out” the private borrower

New cards
48

GDP per capita

GDP / population, is used to measure a nations standard of living

New cards
49

Productivity

output / input , ie. $80 / 4 hours

New cards
50

Long run Phillips curve shifter

the curve shifts the opposite direction of an LRAS shift

New cards

Explore top notes

note Note
studied byStudied by 59 people
Updated ... ago
4.0 Stars(1)
note Note
studied byStudied by 22 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 8 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 39 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 31 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 9 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 37 people
Updated ... ago
5.0 Stars(2)
note Note
studied byStudied by 68 people
Updated ... ago
4.7 Stars(3)

Explore top flashcards

flashcards Flashcard43 terms
studied byStudied by 20 people
Updated ... ago
5.0 Stars(2)
flashcards Flashcard20 terms
studied byStudied by 2 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard358 terms
studied byStudied by 16 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard47 terms
studied byStudied by 1 person
Updated ... ago
5.0 Stars(1)
flashcards Flashcard60 terms
studied byStudied by 2 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard95 terms
studied byStudied by 7 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard41 terms
studied byStudied by 48 people
Updated ... ago
5.0 Stars(3)
flashcards Flashcard61 terms
studied byStudied by 39 people
Updated ... ago
5.0 Stars(1)