Interest Rates, Money, and Forex

Money

100

How the value of something is measured

What is a unit of account?

200

Money must be liquid because

What is money is a medium of exchange?

300

Checking accounts, saving deposits, cash

What are examples of monetary assets?

400

Money that has intrinsic value

What is commodity currency?

500

Money that is based on public faith in the issuer

What is fiat currency?

Money Supply

100

Regulates the money supply of a country

What is the central bank?

200

The primary means the Fed controls the money supply

What are open market operations?

300

When the Federal Reserve reduces its balance sheet

What is quantitative tightening?

400

As of January, more than $18 trillion

What is M1?

500

Overnight lending rate between banks

What is the Fed funds rate?

Money Demand

100

Largely the result of a reduction in purchasing power

What is risk?

200

Inflation causes an increased need for this aspect of money

What is liquidity?

300

Interest rates and inflation influence two aspects of money demand known as

What are opportunity cost and prices?

400

M^D = P × L(i,Y)

What is a model of aggregate money demand?

500

As GDP increases, the demand for money shifts

What is upward?

or

What is to the right?

Money & Forex

100

M^S = M^D

What is equilibrium?

200

Our expectation for the US dollar against foreign currencies if the Federal Reserve buys Treasuries on the open market

What is depreciate?

300

Our expectation of the US Dollar against the Yuan if the Bank of China raises interest rates

What is depreciate?

400

Expected change in the $/€ exchange rate caused by an increase in US GDP

What is decrease?

500

As a result of the Russian war on Ukraine, the supply of the Russian ruble (₽) has decreased. This should cause the value of the ₽ to _________ against foreign currencies. However, the GDP of Russia has also decreased, causing the value of the ₽ _________ .

What are appreciate and depreciate, respectively?

RBI

100

Measure of money that hasn't been used since 2006

What is M3?

200

About $6.75 trillion

What is the level of Total Federal Reserve Assets?

300

Friday

What is CU Friday?

or

What is Pi Day?

400

As prices rise, workers demand higher wages, pushing prices higher

What is the wage-price spiral?

500

Expected inflation if M^S goes from $18T in 2024 to $16T in 2025 and liquidity goes from $22T in 2024 to $21.5T in 2025

What is -8.84%