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Download Financial Institutions Unit 6
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Financial Institutions Barter Currency Medium of exchange Unit of account Store of value Commodity money Fiat money National Savings Public savings Private savings Loanable funds Demand for loanable funds Supply of loanable funds Savings (related to loanable funds) (Financial) investment Stocks Bonds Budget deficit capital formation (related to loanable funds) Crowding out Budget surplus Liquidity Demand deposits M1 M2 Monetary policy Federal Reserve Tight (contractionary) policy Loose (expansionary) policy Reserve Ratio Reserve requirement Discount Rate Prime rate Open market operations Assets Liabilities Fractional Reserve Banking Money Multiplier Leverage Capital requirements Owner’s equity Fixed Monetary policy Fed Funds Rate Cost push inflation Demand pull inflation Quantity Theory of Money Nominal variables Real variables Classical dichotomy Monetary neutrality Velocity of Money Fisher Effect Shoe leather costs Menu costs Anticipated inflation Unanticipated inflation Formulas Formula for the reserve ratio Insert numbers to demonstrate the ratio Formula for the money multiplier Insert numbers to demonstrate the ratio Formula for the Quantity Theory of Money Explain each letter- which are held constant usually Insert numbers to explain the concept Loanable funds Draw graph Explain the slope of the supply and demand curves List the determinants of demand List the determinants of supply Show an increase and decrease in demand Show and increase and decrease in supply Show crowding out Show an increase in capital inflow Money Market Draw graph Explain the slope of the supply and demand curves List the determinants of demand List the determinants of supply Show an increase and decrease in demand Show and increase and decrease in supply Show a contractionary Monetary policy Show the results of an increase in government spending Bank Balance Sheet Create a full balance sheet and include numbers Based on your numbers what is the money multiplier? Add a dollar amount increase to demand deposits How much can the bank lend? What can be the maximum increase in the money supply?
