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Jeopardy!

Jeopardy!. The three functions of money. Medium of exchange Unit of account Store of Value. This includes cash coins and checkable deposits. M1. This includes cash coins and checkable deposits along with savings accounts and money market mutual funds. . M2.

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Jeopardy!

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  1. Jeopardy!

  2. The three functions of money.

  3. Medium of exchangeUnit of accountStore of Value

  4. This includes cash coins and checkable deposits

  5. M1

  6. This includes cash coins and checkable deposits along with savings accounts and money market mutual funds.

  7. M2

  8. The portion of a deposit that banks are required to keep on hand.

  9. Required reserve.

  10. The quantity of money will only reach its theoretical limit if both of these things happen.

  11. Banks lend all excess reserves and all cash is deposited into banks.

  12. The “price” of money as seen in a money market model.

  13. Interest rates

  14. The interest rate the Fed charges to member banks for loans

  15. Discount Rate

  16. The interest rate that banks charge to each other for overnight loans.

  17. Federal funds rate

  18. Why does holding on to cash cost a person money?

  19. Cash pays no interest

  20. How is the real rate of interest found?

  21. Nominal interest minus rate of inflation.

  22. The Fed’s buying and selling of bonds

  23. Open market operations

  24. When the Fed engages in open market operations it targets this interest rate

  25. The Federal Funds Rate

  26. If the fed buys bonds interest rates will do this

  27. Fall

  28. Assume a bond with a coupon of $1000 cost you $800 and it matures one year from today. What interest rate does the bond pay?

  29. 25%

  30. The Federal Reserve Bank launches a plan to buy billions of dollars worth of bonds. A monetarist would criticize this by suggesting it will only lead to this problem.

  31. Inflation

  32. Fed policy of changing the equilibrium of the moneymarket to maintain economic stability

  33. Monetary policy

  34. The number of times the average dollar moves through transactions in a given period of time.

  35. Velocity.

  36. Another name for this equationM x V = P x Y

  37. Equation of Exchange

  38. He is the chairman of the Federal Reserve Bank

  39. Ben Bernanke

  40. 3 tools the Fed has to affect monetary policy

  41. Open Market Operations, Discount Rate, and Reserve Requirement

  42. The supply of money will change due to this

  43. Any action by the Fed.

  44. The demand for money will change when this changes

  45. An autonomous change in spending.

  46. Increasing the reserve requirement will effect themoney supply in what way?

  47. Decrease

  48. If spending on nominal GDP increases how will the demand formoney be affected?

  49. Increase

  50. DAILY DOUBLE

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