ECO 1002: Introduction to Macroeconomics - Money, Banking, and Monetary Policy

These flashcards cover key concepts from the ECO 1002 lecture on Money, Banking, and Monetary Policy, helping students prepare for their exams.

Money is simply an __ social norm on a global scale.

implicit

The three functions of money are Medium of Exchange, Store of Value, and __.

Unit of Account

Commodity Money has __ value, like gold or silver.

intrinsic

Fiat Money has __ value and is worth only the paper it’s printed on.

no intrinsic

The Money Multiplier demonstrates that banks create __ by issuing loans.

deposits

The __ is the governing body of the Federal Reserve System.

Board of Governors

The Federal Open Market Committee (FOMC) is responsible for setting __ policy.

monetary

The Fed now implements monetary policy primarily through __ interest rates.

administered

The Money Multiplier equation is expressed as M1 = 1/θ × C, where C represents __.

cash deposits

The IORB is an interest rate paid by the Fed for banks holding __.

reserves

In the OLD WAY of banking, monetary policy focused on scarce __ and monetary aggregates.

reserves

The __ Market allows banks to borrow and lend reserves to each other.

Federal Funds