Flashcards - CLEP Social Sciences and History: Central Bank and the Money Supply

Flashcards - CLEP Social Sciences and History: Central Bank and the Money Supply
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savings account
Saving accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money in the narrow sense of a medium of exchange
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real interest rate
The real interest rate is the rate of interest an investor, saver or lender receives after allowing for inflation
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investment
To invest is to allocate money in the expectation of some benefit in the future
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inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time
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certificate of deposit
A certificate of deposit is a time deposit, a financial product commonly sold in the United States and elsewhere by banks, thrift institutions, and credit unions
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central bank
A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates
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central bank
A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates
certificate of deposit
A certificate of deposit is a time deposit, a financial product commonly sold in the United States and elsewhere by banks, thrift institutions, and credit unions
inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time
investment
To invest is to allocate money in the expectation of some benefit in the future
real interest rate
The real interest rate is the rate of interest an investor, saver or lender receives after allowing for inflation
savings account
Saving accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money in the narrow sense of a medium of exchange
Stocks
Stocks are devices that were used internationally, in medieval, Renaissance and colonial American times as a form of physical punishment involving public humiliation
Federal Reserve
The Federal Reserve System - also known as the Federal Reserve or simply the Fed - is the central banking system of the United States
The quantity theory of money
In monetary economics, the quantity theory of money states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply
The velocity of money
The term "velocity of money" refers to how fast money passes from one holder to the next
equation of exchange
In economics, the equation of exchange is the relation: where, for a given period, is the total nominal amount of money supply in circulation on average in an economy
Monetarism
Monetarism is a school of thought in monetary economics that emphasizes the role of governments in controlling the amount of money in circulation
index fund
An index fund is a mutual fund or exchange-traded fund with specific rules of construction that are adhered to regardless of market conditions

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