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Definition of M2
Broad measure of money, consisting of M1 plus various deposits that are less substitutable with cash.
M1-A: Currency plus demand deposits
money supply expressed in base-year dollars, calculated by dividing the money supply by a price index.
A monetary policy of matching wage and price increases with money supply increases so that the real money supply does not fall and push the economy into recession.
The process whereby the banking system transforms a dollar of reserves into several dollars of money supply.
Whatever measure of the money supply is chosen for application of the monetarist rule will soon begin to misbehave.
A policy of decreasing the rate of growth of the money supply gradually over an extended period of time, so that inflation can adjust with smaller unemployment cost. Contrast with cold-turkey policy.
School of economic thought stressing the importance of the money supply in the economy. Adherents believe that the economy is inherently stable, so that policy is best undertaken through adoption of a policy rule.
Proposal that the money supply be increased at a steady rate equal approximately to the real rate of growth of the economy. Contrast with discretionary policy.
Any measure of the economy's money supply.
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Change in the money supply per change in the money base.
The doctrine that the money supply affects only the price level, with no long-run impact on real variables.
Purchase or sale of government securities by the monetary authorities to increase or
Theory that velocity is constant, and so a change in money supply will change nominal income by the same percentage. Formalized by the equation Mv = PQ.
Central bank action offsetting money supply changes automatically generated by a balance of payments surplus or deficit under a fixed exchange rate system.
A check issued by a bank to make a payment. Treasurer's checks outstanding are counted
The number of times during a year that the money supply turns over in supporting that year's economic activity, measured as the ratio of nominal income to the money supply.
Total quantity of goods and services supplied.
Aggregate Supply Curve
Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.
An option is at-the-money if the strike price of the option is equal to the market price of the
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
A situation in which supply exceeds demand.
Fiat money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat money is dependent upon the performance of the economy of the country which issued it. Canada's currency falls into this category.
The amount of securities believed to be available for immediate purchase, that is, in the
See money base.
money that moves across country borders in response to interest rate differences and that moves
A put option that has a strike price higher than the underlying futures price, or a call option
Any item that serves as a medium of exchange, a store of value, and a unit of account. See medium of exchange.
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.
Cash plus deposits of the commercial banks with the central bank.
Money center banks
Banks that raise most of their funds from the domestic and international money markets, relying less on depositors for funds.
This is the process by which "dirty money" generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.
Related: Investment management.
Related: Investment manager.
money markets are for borrowing and lending money for three years or less. The securities in
A market that specializes in trading short-term, low-risk, very liquid
Market for short-term financial assets.
A financial market in which short-term (maturity of less than a year) debt instruments such as bonds are traded.
Financial market in which funds are borrowed or lent for short periods. (The money market is distinguished from the capital market, which is the market for long term funds.)
Money market demand account
An account that pays interest based on short-term interest rates.
Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances,
money market fund
A type of mutual fund that invests primarily in short-term debt securities maturing in one year or less. These include treasury bills, bankers’ acceptances, commercial paper, discount notes and guaranteed investment certficates.
Money market hedge
The use of borrowing and lending transactions in foreign currencies to lock in the
Money market notes
Publicly traded issues that may be collateralized by mortgages and MBSs.
A guaranteed form of payment in amounts up to and including $5,000. You might request a money order in order to pay for tuition fees at a university or a college, or for a magazine subscription.
Money purchase plan
A defined benefit contribution plan in which the participant contributes some part and
Money Rate of Interest
See interest rate, nominal.
Money rate of return
Annual money return as a percentage of asset value.
In a Treasury auction, the amount by which the par value of the securities offered exceeds that of
A call option is out-of-the-money if the strike price is greater than the market price
Precautionary demand (for money)
The need to meet unexpected or extraordinary contingencies with a
Sale of bonds by the government to the central bank.
Raw material supply agreement
As used in connection with project financing, an agreement to furnish a
Speculative demand (for money)
The need for cash to take advantage of investment opportunities that may arise.
An amount made available for sale, always associated with a given price.
the cooperative strategic planning,
n event that influences production capacity and costs in an economy.
View that incentives to work, save, and invest play an important role in determining economic activity by affecting the supply side of the economy.
Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar
Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.
New muni bond issues scheduled to come to market within the next 30 days.
Actions taken by the central bank to change the supply of money and the interest rate and thereby affect economic activity.
The channels by which a change in the demand or supply of money affects aggregate demand for goods and services.
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