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The use of government money to influence the economy
Fiscal policy
Reduction of government controls in a particular business, market, economy, etc.
Deregulation
A form of payment
Currency
Determines how much you pay when you borrow
Interest Rate
A type of monetary policy where central banks purchase government bonds
Quantitative easing
The theory that the government can stabilize the economy through intervention and things such as fiscal policy
Keynesian Economics
Studies the entire economy(not just individual)
Macroeconomics
Allows banks to create new money and loan out money
Fractional Reserve System
Used by central banks to increase money supply and make credit more easily available at a lower interest rate
Easy money policy
Babies born right after WWII
Baby boomers
Financial benefits to workers that don't have job to no fault of their own
Unemployment Insurance
Representative of the overall price levels within an economy and the total output of the economy
Aggregate Supply
The minimum amount of money a bank cannot lend out within a customer's reserve
Reserve Requirement
Typically raises interest rates & selling government bonds for higher
Tight money policy
Boosts the supply of goods and services to increase productivity
Supply side policy
Some examples include: Social security, medicare, & medicaid
Entitlements
The total spending of an economy on goods at different price levels
Aggregate Demand
Reserves that can be lent out from the bank
Excess Reserves
Used to discount future cash flow
Discount rate
Total supply of the economy where the price is fixed
Aggregate Supply
Focuses on improving efficiency and lowering business costs
Supply-sided policy
Commercial banks joined to the FED
Member banks
Monetary Policy
Benchmark (used by commercial banks) to determine creditworthiness
Prime rate
Takes into account consumer spending, government spending, and net exports to represent total domestic spending
Aggregate Demand