Chapter 15 Vocabulary

A

1

policy that involves changing the rate of growth of the supply of money in circulation

monetary policy

2

monetary policy that makes credit inexpensive and abundant

loose monetary policy

B

1

Nickname for the Federal Reserve System

Fed

2

buying and selling U.S. securities by the Fed to affect the money supply

open market operations

C

1

group that meets 8 times a year to decide how the Fed should control the money supply

Federal Open Market Committee

2

rate of interest that banks charge on loans to their best business customers

prime rate

D

1

group that directs the operation of the Fed

Board of Governors

2

interest rate that the Fed charges on loans to banks

discount rate

E

1

monetary policy that makes credit expensive and in short supply

tight money policy

2

interest rate that banks charge each other on loans

federal funds rate