Across
- 2. The smallest fraction of deposits that the Federal Reserve allows banks to hold.
- 3. An arrangement in which the Federal Reserve stands ready to lend money to banks.
- 6. The currency banks hold in their vaults plus their deposits at the Federal Reserve.
- 9. Any asset that can easily be used to purchase goods and services.
- 11. The profit earned on the project expressed as a percentage of its cost.
- 17. The ratio of the money supply to the monetary base. It indicates the total number of dollars created in the banking system by each $1 addition to the monetary base.
- 20. Shows the relationship between the quantity of money demanded and the interest rate.
- 21. The interest rate the Fed charges on loans to banks.
- 22. are rules set by the Federal Reserve that determine the required reserve ratio for banks.
- 23. The sum of currency in circulation and bank reserves.
Down
- 1. This allows banks that fall short of the reserve requirement to borrow funds from banks with excess reserves.
- 4. $1 realized one year from now is equal to $1/(1 + r)
- 5. Guarantees that a bank’s depositors will be paid even if the bank can’t come up with the funds, up to a maximum amount per account.
- 7. a purchase or sale of government debt by the Fed.
- 8. Shows how the quantity of money supplied varies with the interest rate.
- 10. An asset that individuals acquire for the purpose of trading goods and services rather than for their own consumption.
- 12. A means of holding purchasing power over time.
- 13. An institution thatoversees and regulates the banking systemand controls the monetary base.
- 14. A measure used to set prices and make economic calculations.
- 15. is a hypothetical market that illustrates the market outcome of the demand for funds generated by borrowers and the supply of funds provided by lenders.
- 16. A tool for analyzing a business’s financial position by showing, in a single table, the business’s assets (on the left) and liabilities (on the right).
- 18. The fraction of bank deposits that a bank holds as reserves.
- 19. The total value of financial assets in the economy that are considered money.