Glossary

discount rate	The rate at which the Fed itself loans money to banks.



federal funds rate	The rate a which banks borrow from one to another to meet reserve requirements.



M1	Cash + coin + checking accounts.



M2	M1 + savings accounts + small CDs.



M3	M2 + large CDs.



monetary aggregate	A measure of the quantity of money in the economy.



open-market operations	The buying and selling of bonds, which, respectively, increases or decreases the money supply, thereby influencing interest rates.



reserve ratio	The percentage of every dollar deposited in a checking account that a bank must maintain at a Federal Reserve branch.

2003 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.