Inflation: Monetary Policy and Traditional Commercial Banks Essay

Submitted By eugene3438
Words: 669
Pages: 3

Inflation – Good and prices rises. Get poor because value of money go down. current account – goods and services going back and force. balance of payments - A record of all transactions made between one particular country and all other countries during a specified period of time capital account - A nation account that shows the net change in asset ownership for a nation.
Eurocurrency – money outside of a country. fiscal policy - Government spending policies that influence macroeconomic conditions. These policies affect tax rates, interest rates and government spending, in an effort to control the economy. monetary policy - The actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Federal Reserve Board - The board sets Fed policy regarding the discount rate and reserve requirements costs of inflation – shuts down the pricing of products. Deflation - A general decline in prices, often caused by a reduction in the supply of money or credit. Loss of factories, employment, low income. stagflation – high unemployment derivatives - a term that refers to a wide variety of financial instruments or "contract whose value is derived from the performance of underlying market factors, such as market securities or indices, interest rates, currency exchange rates, and commodity, credit, and equity price subprime housing crisis – mortgage loss futures - A financial contract obligating the buyer to purchase an asset bubble economy - It could also be described as a trade in products or assets with inflated values Shadow banking system - is the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks. It is sometimes said to include entities such as hedge funds, money market funds and structured investment vehicles. speculative attack - economists to denote a precipitous acquisition of some assets (currencies, gold, emission permits, remaining quotas) by