Federal funds market Federal funds rate Discount rate Open-market operations Short-term interest rates Long-term interest rates Money demand curve Liquidity preference model of the interest rate Money supply curve Target federal funds rate Expansionary monetary policy Contractionary monetary policy Taylor rule for monetary policy Inflation targeting Zero lower bound for interest rates Monetary neutrality | a graphical representation of the negative relationship between the quantity of money demanded and the interest rate. The money demand curve slopes downward because, other things equal, a higher interest rate increases the opportunity cost of holding money. the Federal Reserve’s desired level for the federal funds rate. The Federal Reserve adjusts the money supply through the purchase and sale of Treasury bills until the actual rate equals the desired rate. monetary policy that, through the lowering of the interest rate, increases aggregate demand and therefore output. the concept that changes in the money supply have no real effects on the economy in the long run and only result in a proportional change in the price level. monetary policy that, through the raising of the interest rate, reduces aggregate demand and therefore output. the interest rate the Fed charges on loans to banks in trouble. a graphical representation of the relationship between the quantity of money supplied by the Federal Reserve and the interest rate. a purchase or sale of U.S. Treasury bills by the Federal Reserve, undertaken to change the monetary base, which in turn changes the money supply. a rule for setting the federal funds rate that takes into account both the inflation rate and the output gap. the interest rate on financial assets that mature within less than a year. the financial market that allows banks that fall short of reserve requirements to borrow funds from banks with excess reserves. the interest rate on financial assets that mature a number of years into the future. a model of the market for money in which the interest rate is determined by the supply and demand for money. an approach to monetary policy that requires that the central bank try to keep the inflation rate near a predetermined target rate. statement of the fact that interest rates cannot fall below zero. the interest rate at which funds are borrowed and lent in the federal funds market. |
Federal funds market
Federal funds rate
Discount rate
Open-market operations
Short-term interest rates
Long-term interest rates
Money demand curve
Liquidity preference model of the interest rate
Money supply curve
Target federal funds rate
Expansionary monetary policy
Contractionary monetary policy
Taylor rule for monetary policy
Inflation targeting
Zero lower bound for interest rates
Monetary neutrality