1.

part 1.

The financial system

1.1

charter 1.1

the financial system and

functions
1.2
1.3

charter 1.2
the nature of money

charter 1.3
financial

intermediation
1.4

2.

charter 1.4

the payment

part 2

the financial institution

2.1

charter 2.1
the banking institution
2.2

charter 2.2
the nonbank financial

institution

3.
part 3.

The financial market

3.1

charter 3.1
the asset market

charter 3.2 the money

3.2
market
3.3

charter 3.3 the foreign

exchange market
3.4

charter 3.4 the traditional

market

4.
part 4

,
the money supply, monetary policy
4.1

 4.2

charter 4.1
the money supply

charter 4.2
the process of money

increasement
4.3

charter 4.3 the money and

total economy
4.4

charter 4.4

monetary policy

1.
part 1
1.1.

The financial system

charter 1.1 The financial system and functions

,

1.

Finance

2.

Financial system

3.

Financial institution

4.

Financial market

5.

Central bank

.
A government bank

The
economic
monetary relationship
of contributing and
using the money and
the fund of money

The
merge
of
financial
institution
and financial market
Financial negotiator

The lawful profit

organization that
deposits others
money and lends
money under its
name and performs
transaction between
the parties

fo bank generally
responsible
for
national
monetary
policy

6.

Commercial bank

7.

Nonbank financial
institution

Insurance company

The
insurance
company
collects
charge and fees from
insurers and refund or
repay
the
certain
amount of insured
assets
if
accident
occurs.

The retirement fund

The one kind of

financial
intermediaries.
The
closely operates with
government agencies.

.


.
concerning spending
and taxation.

Collects large amount

of money from small
investors and spends
it.

8.

Financial company

10

11

12

13

14
.

The investment fund

Savings and loan

association (S&L)

Fiscal policy
Government policy

Financial negotiator
Financial negotiator
The
financial
company
depostits
large
amount
of
money
and
distributes to small
customers.

This institution mainly

deposits money and
lends money
An
interest-bearing
relationship used by a
customer
to
accumulate
funds.
Savings
accounts
have
no
fixed
maturity date

 2 .2
charter 2.2

money function

Money

1.

2.

Currency

Counterfeit
money

3.

4.

5.

Coin

Barter

Legal tender; coin

and
currency
declared
by
a
government to be
the
accepted
medium
of
exchange
Paper money as
opposed to coin
Spurious ( bogus)
coins and currency
that
have
been
made to appear
genuine
Metallic money in
contrast to paper
money / currency /
The direct physical
exchange
of
merchandise,
not
accompanied by an
exchange of money.

,

,
, .
,
,

,
,
.

6.

Legal tender

7.

M1

M1

8.

Government-backed
currency that is
acceptable in
payment of all
private and public
debts

Money supply
A
definition
of
Money supply that
adds to M1 such
assets as saving
accouts small- denomination
time
deposits
money

1 +

9.

10
.

liguidity

market
deposit
accounts
and
money
market
mutual fund sharis
Money supply that
adds to M1 such
and M2 such assets
as
largedenomination time
deposits
Ability to cknvert an
asset
into
cash
guickly with little
loss in value

2 +

1. 3

charter 1.3
Financial intermediation

1.

Financial
intermediation

Indirect finance, in
which savers place
funds with financial
intermediaries that
in turn lend to
ultimate borrowers.

1.4

charter 1.4 Payment

1.

Debit card

A piastic card enabling

the
cardholder
to
purchase
good
or
services the cost of
which is immediately
charged to his or her
bank account. Debit
cards are used to
activate point of sale
terminals
in
supermarkets,
gas
stations, and stores.
Together with credit
cards,
they
are
commonly referred to
simply as bank cards.
A plastic card ( or its
eguivalent ) to be used
from time to by the
cardholder to obtain

,

,
.

2.

3.

4.

5.

6.

7.

8.

9.

10

Cash Letter

Cash dispenser

Credit card

Cash a chek

Bill of lading-

Bilateral contract

Beneficiary

Bank draft

Bank check

money
good
or
services
possible
under a line of credit
established
by
the
card
issuer
The
cardholder is billed for
any
outstanding
balance
An
interbank
transmittal
form,
resembling a deposit
slip,
used
to
accompany cash items
sent from one bank to
another.

Equipment capable of
automatically
delivering amounts of
cash to a customer,
usually upon insertion
of a bank card.

To give money in
exchange for a check
drawn
an
another
financial institution.

A document issued by
a transporter of goods
(carier)
covering
a
shipment
of
merchandise. It may
be negotiable or non
negotiable form and is
a contract to ship the
merchandise. A receipt
for it, and a document
of legal title.

.

,

.

An agreement

The party who is to

receive the proceeds
of a trust, insurance
policy, letter of credit,
or other transaction.

A check drawn by a
bank on its account
with another bank.

A check, also known

as
cashiers,
treasurers, or official

11
.

Transit
check

12
.

13
.

14
.

15
.

16
.

Traveler's check

Forged check

Automat transfer
service-

Automated teller
machines (ATMs)

Automated teller

machine
ATM /

check, drawn by a
bank on itself. Since
the
drawer
and
drawee are one and
the same, acceptance
is
considered
automatic and such
instruments have been
legally held to be
promises to pay.

A negotiable
instrument sold by a
bank or other issuer in
various denotations for
the convenience of
individuals who do not
wish to carry cash.
These checks are
readily convertible into
cash upon proper
identification, usually
by a signature in the
presence of the
cashing party.

Any item that a bank

chooses to classify as
not payable locally; an
out-of-town check

:


,

A demand draft, drawn

on a bank, on which
the drawer's signature
is not genuine
A service by which a
bank
moves
funds
from one type of
account to another for
its customer on a
preauthorized basis.
Electronic
facilities,
located inside or apart
from a
financial
services
institution, for handing
many
customer
transactions
automatically.
a card operated
facility for making
bank deposits and
withdrawals

Automated
17
.
18
.

19
.

20
.

clearing

Society for
Worldwide
interbank
Financial
Telecommunicati
ons (SWIFT)

A telecommunications
system that transfers
funds between banks
internatiolally

/ACH/
SWIFT

22
.

24
.

an electronic system
for making regular
payments of receiving
regular credits

house

21
.

23
.

Invoice

Insurance
certificate

A commercial bill for

goods sold or services
rendered

A document, issued by
an insurer, providing a
degree of protection
for merchandise
during transit

Equity

Ownership interest,
represented by
stockholders'
investment and
retained earnings; the
excess of a firm's
assets over its
liabilities

Drawer

The party who issues a

set of written
instructions to a
drawee, calling for a
payment of funds

Drawee

The party to whom the

drawer issues
instructions to make
payment. In the case
of checks, the drawee
is a bank or other
financial institution

Draft

A signed, written order

by which one party
(the drawer) instructs
another (the drawee)
to make payment to a
third (the payee). In
international banking,
a draft is often called a
bill of exchange

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,

25
.

26
.
27
.

28
.

29
.

30
.

31
.

Documentary
draft

Order

Transit
check

Terminal

Sight letter of
credit

Sight draft

Settlor

A written order to pay,

accompanied by
securities or other
papers to be delivered
against payment or
acceptance

Any item that a bank

chooses to classify as
not payable locally; an
out-of-town check

The holding of
property by two or
more persons in such
a way that each has
an undivided interest
that, at the death of
one, passes to the
heirs or devisees and
not an not to the
survivor(s)
An instrument, issued
by a bank, by which
the bank's credit is
substituted for that of
an individual or
corporation. In
merchandise
shipments, a sight
letter of credit permits
payment of the funds
immediately upon
presentation of the
documents evidencing
the shipments.
A written order to pay
upon presentation or
delivery
A person who creates
a trust (such as a
living trust) to become
operative during
his/her lifetime. Also
called grantor, trustor,

:


,

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.

.
, ,

.

or donor

32
.

33
.

34
.

35
.

36
.

37
.

38

Letter of credit

Revocabl e

A bank that issues a

letter of credit based
on the application of a
customer
A document issued to
certify the country of
origin of goods or
merchandise.

A document issued by
an
appraiser
and
attesting that goods
being shipped conform

A bank instrument
substituting the credit
of the issuing bank for
the credit of another
party, such as an
importer of
merchandis

A term usually
associated with letters
of credit. It allows the
letter of credit to be
canceled or amended
by either party without
the approval of the
other.

Irrevocable

The term used to

describe a letter of
credit that cannot be
amended or canceled,
except by full mutual
agreement between
the parties

Advising bank

A
bank
that
has
received
notification
from another financial
institution
of
the
opening of a letter of
credit. This advising
bank then
contacts
the
beneficiary,
reaffirming the terms
& conditions of the
letter of credit

Issuing bank

Certificate
origin

of

Certificate
quality

of

to
the
buyers
specifications.

financial institution

Part 2

2.1
charter 2.1

banking institution

1.

2.

National
bank

Central bank

A government bank fo
bank
generally
responsible for national
monetary policy

Mortgage
loan

Real estate credit, usually

extended on a long-term
basis with the property as
security.

3.

4.

5.

6.

7.

A
commercial
bank
operating under a federal
charter and supervised
and examined by the
Comptroller
of
the
Currency.
The
word
national must appear in
some form in the banks
corporate title. All national
banks must belong to the
Federal Reserve System
and FDIC.

(
)

Overdraft

Credit

Creditor

Credit risk

A
negative
(minus)
balance in an account,
resulting from the paying
of checks for an amount
greater
than
the
depositors balance.
An
advance
of
cash
merchandise
or
other
commodity in exchange for
apromise
or
other
agreement to pay at a
future date with interest if
so agreed
A party to whom money is
owed by another

The

possibility that a
debtor may not be
able to repay

.



.


FDIC-
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.

,


,

8.
9.

10
.

11
.

12
.

13
.

14
.
15
.

16
.

/
/

Interest
Deposit

Corresponde
nt bank

A bank that maintains an

account relationship and /
or engages in an exchange
of services with another
bank

Clearing

Mhe process or methed by

which checks ahd / or
other
pointofsele
mransactions are moved
physicaiiy or electronicalle
from the point or origin to
a bank or order financial
institution that maintains
the customers account
number

Automat
clearing
house

CHIPS
(Clearing
House
Interbank
Payment
System

Branch bank

Bank
statement

Money paid for the use of

money
Any placement of cash
checks or other drafts with
a bank for creit to an
account

Bank holding
company

Bank
directors

A computerized facility
that perfoms the clearing
of paperless (electronic)
entries between member
financial institutions.

Aprivate
telecommunications
service operated through
the New York Clearing
House
for
settlement
among participgting banks

.

,

,

, .

A bank that maintains a

head office and one or
more branches is subject
to state law.
A report, rendered by a
bank
to
a
customer,
showing
the
account
balance at the start of a
period, the transactions
affecting
the
closing
balance
A corporation that owns,
controls, or otherwise has
the power to vote at least
25 percent of the voting
stock in one or more
banks.

The individuals elected by

the banks stockholders to

25%-

17
.

constitute the board of

directors and who form the
active, governing body of
the bank as a corporation.

18
.

A detailed listing of assets,

liabilities,
and
capital
accounts
(net
worth),
showing
the
financial
condition of a bank or
company as of a given
date. A balance sheet
illustrates
the
basis
accounting
equation:
assets= liabilities + net
worth.In
banking,
the
balance sheet is usually
referred
to
as
the
statement of condition

, ,

The signature of those

parties who have the legal
right to issue instructions
regarding an account.

19
.

20
.

21
.

22
.

23
.

Balance
sheet

Authorized
signature

Automat
clearing
house

Auditor

Audit -

Asset-

Income
statement

A computerized facility
that perfoms the clearing
of paperless (electronic)
entries between member
financial institutions.

In banking, an individual,
usually appointed by the
banks
directors
and
reporting directly to them,
who is responsible for
examining any and all
phases of the banks
operations.
A
formal
or
official
examination
and
verification of account
Anything owned that has
commercial or exchange
value. Assets may consist
of specific property or of
claims against others, in
contrast to obligations due
to others
A record of the income and
expenses of a bank or

.
,
.

business covering a period

of time. It is also called a
profit and loss statement

24
.

25
.

28
.

29
.

30
.

31
.

1Advice-

Account
receivable-

Legal
reserves

Fraud

Federal
Reserve
System

A written acknowledgment
by a bank of a transaction
affecting an account; for
example, debit or credit
advices.

Amounts due to a bank or

business for merchandise
sold on credit or for
services
rendered.
Accounts receivable are
short-term assets

The portion of banks'

demand and time deposit?
that must be kept in the
form of cash or acceptable
equivalents for depositors'
protection

Intentional
misrepresentation of a
material fact by one party
so that another party,
acting on it, will part with
property or surrender a
right
The organization created
by the Federal Reserve Act
in 1913, consisting of the
12 district banks and their
branches plus the member
banks, who are the legal
owners. The Fed Board of
Governors, headquartered
in Washington, exercises
overall control over the
nationwide operations of
the System

. ,

.
,

.

1913

12 ,
,
,

32
.

33
.

34
.

35
.

Federal
Reserve
notes

The paper money issued

by any one of the 12
Federal Reserve banks and
officially designated by the
federal government as
legal tender. Each such
note is an interest-free
promise to pay on d
emand

Federal
Reserve
banks

The 12 district institutions

that deal with member
banks and the
government. The district
banks maintain branches
and check processing
centers as necessary

Factor

A financial firm that

purchases at a discount
the accounts receivable of
other firms and assumes
the risks and
responsibilities of
collection

Eurodollars

Deposits that are

denominated in dollars but
held in foreign branches or
banks

Escrow

The holding of funds,

documents, securities, or
other property by an
impartial third party for
the other two participants
in a business transaction.

12

12
.


,

, ,

36
.

37
.

38
.

39
.

40
.

When the transaction is

completed, the escrow
agent releases the
entrusted property

Equity

Overdraft

Market risk

Liquidity

Liability

41
.

42
.

Bank failure

Ownership interest,
represented by
stockholders' investment
and retained earnings; the
excess of a firm's assets
over its liabilities
A
negative
(minus)
balance in an account,
resulting from the paying
of checks for an amount
greater
than
the
depositors balance.
The possibility of decline in
the current value of a
security; the loss that the
holder of an investment
may have to assume at
the time of sale.
The quality that makes an
asset quickly and easily
convertible into cash; also,
the ability of a bank,
business or individual to
meet current debts.

Anything owed by a bank,

individual, or business. A
banks largest liability is
the sum total of its
deposits.

situation in which a bank

goes out of
business
because it can not meet
its
obligations.
See
assumption method and
payoff method

a summary statement of
an individuals or a

;
,

.
,

. /


/

43
.

44
.

45
.

Balance
sheet

Asset

World Bank
(International
bank for
Reconstructio
n and
Development
)
Savings bank

46
.

47
.

48
.

49
.

IBF-

businesss financial
condition on a given date
an item owned that has a
value, 2 an item on a
balance sheet showing
the value of property
owned or receivable
The market in which an
asset is traded for
immediate delivery also
called the cash market as
opposed to a market for
forward or future delivery
A financial institution that
traditionally was limited to
accepting savings deposits
and making home
mortgage loans

Retained
earnings

Profits of a corporation
that are not distributed as
dividends to shareholders

Reserves

Funds that a bank holds in

the from of vault cash or
deposits at the Federal
Reserve

International
Banking
Facility (IBF

A domestic branch bank

established for
international banking and
treated for regulatory
purposes as a foreign
branch.

rate

Income
statement

50
.

51
.

52
.

Real interest
rate

,






.



.

A summary statement of
an individuals or a
businesss current receipts
and current expenditures
during a period of time.
The interest rate in terms
of goods and services;
approximated by
substracting the rate of
inflation from the nominal
interest rate
A loan that allows the
lender to make periodic

,
.


/

53
.

Variable rate
loan

adjustments in the interest

rate, according to
fluctuating market
conditions. Also referred to
as an adjustable rate loan.
An extension of credit with
a specific repayment date.

54
.

Time loan

Time letter of
credit

A letter of credit
containing a specific
maturity date for payment.

: Time
deposit

An account which carries a

specific maturity date, with
limitations on withdrawals
before that date.

Tenants in
common

The holding of property by

two or more persons in
such a way that each has
an undivided interest that,
at the death of one, passes
to the heirs or devisees
and not an not to the
survivor(s)

.


.

55
.

56
.

57
.

58
.

Statement
savings

61
.

62
.

A savings account in which

a periodic statement
replaces the passbook

State bank

A commercial bank
chartered by the state in
which it is headquartered.

Service
charge

A fee levied by a bank for

services rendered.

Savings
account

An interest-bearing
relationship used by a
customer to accumulate
funds. Savings accounts
have no fixed maturity
date.

59
.
60
.

.


.

:

Safety

Reserves

The ideal perception by

customers that the bank is
in a position to honor all
anticipated demands for
withdrawals of funds and
that the bank has taken all
appropriate measures to
provide full protection for
all property entrusted to it.
Portions of a bank's funds

set aside to meet legal

requirements and/or for
known or potential
expenses or losses.

63
.

Receiving
teller

64
.

A bank representative who

accepts and verifies
deposits and issues
receipts for them, but has
no paying or cashing
duties.

.

,



.
,

2.1
charter 2.1 nonbanking financial institution

1.

2.

3.

4.

Credit union

Pension trust

Living trust

Savings and

A
voluntary
cooperative
association
of
individuals
having
some common bond
( for example place of
employment)
organized to accept
deposits extend loan
and
provide
otder
financial services
A
trust
fund
established
by
an
employer (usually a
corporation)
to
provide benefits for
incapacitated
or
retired
employees,
with or without their
contributions

A trust fund that

becomes
effective
during the lifetime of
the trustor (settlor).
The relationship that
traditionally was
limited to accepting
savings deposets,

.

, ,

.

.



.

5.

6.

7.

8.

9.

loan
association
(S&L)

Insurance
company

Thrift
institution

Savings bank

Savings and
loan
association
(S&L)

Mutual fund

usually as shares, and

making home
mortgage loans

A financial institution
providing protection
against loss (of life or
property) or costs
(such as medical or
legal costs) by
accepting payments
(premiums) in return
for a guarantee of
compensation.
The broad term used
to describe savings
and loan associations,
whose primary
function is accepting
deposits and granting
mortgage loans.

A thrift institution
specializing in savings
accounts but also
offering other forms of
deposit relationships,
including checking
accounts. See also
mutual savings bank.
Many savings banks
have become
federally chartered,
rather that state
chartered.
A federally chartered
or state or state
chartered thrift
institution that
accepts various types
of deposits and uses
them primarily for
mortgage loans. By
making deposits, the
members of a
cooperative S&L are
actually buying stock
in it.
A fund that pools the
investment of a large
number
of
shareholders
and
purchases securities
such as stocks or in
money market mutual
fund money market
instruments

,

,

.

-

 3.
part
3.1
charter 3.1

Common
stock

2.

Preferred stock

4.

financial market

1.

Discount

capital market

3.

Coupon

Certificates evidencing
ownership
of
a
corporation
and
generally giving the
stockholder
voting
rights
Common
stockholders
have
rights inferior to those
who
hold
the
corporation
s
bond
preferred stock and
other debts

,


,
.

Securities that give the

holder a right to share
in
a
banks
or
corporations
profits
before
common
shareholders.
If the
institution is liquidated,
preferred stockholders
have a prior claim on
its assets over common
stockholders
and
certain other creditors.
Preferred stock usually
does not give the
holder voting

.









.

Interest withheld when

a note draft or bill is
purchased or collected
in advance at the time
a loan is made
One of a series of
promissory notes of
consecntive maturimies
attavhed to bond or
other debt certificate
and intended to be
detached
and

,





, .

.

presented
on
their
respective due dates
for payment of interest
A bisiness organization
treated as a legal entity
and owner by a group
of stockholders The
stockholders
( shareholders ) elect
the directors who will
manage the affairs of
the corporation

5.

6.

7.

8.

9.

10
.

Capital stock
-

Capital

Bond
indemnity

11
.

Corporation

Bond

Bill
Investment

of

Usually
synonymous
with common stock; the
total amount of shares
of
ownership
in
corporation. The total
amount of corporations
common and preferred
stock is authorized by
its charter or certificate
of incorporation
An accounting term
describing the excess
of assets over liabilities.
Capital
accounts
include money raised
through the sale of
stock,
retained
earnings,
and
borrowings in the form
of notes or debentures.
A writing instrument
issued to protect a
party against loss
An
instrument
that
evidences
long-term
debt. The issuer (a
corporation,
unit
of
government, or other
legal entity ) promises
to repay the stated
principal at a specified
date. Bonds may be
registered(identifying
the holder ) or bearer
(not
identifying
the
holder).
Money; paper currency

The exchange of
money, either for a
promise to pay at a
later date (as with
bonds) or for an

.


.

.
,

c
.
/ ,
,

.


.

12
.

13
.

14
.

15
.
16
.

Earnings per
share

Auction
market

Securities

Share

Secondary
securities
market

Real assets

17
.

18
.

Broker

19
.

dividend

ownership share in a
business (as with
stocks)
The most common
method of expressing a
company's profit. It is
obtained by dividing
the profits by the
number of outstanding
shares of common
stock
a market where
buyers and sellers
bargain directly with
each other
Financial instrument
representing ownership
or debt, such as stocks
and bonds that provide
claims to future
expected cash flows
A unit of ownership in
the capital stock of a
corporation
A financial market in
which previously
issued securities are
traded
Property such as land
or equipment. As
distinguished from
financial assets. such
as stocks and bonds
An
institution
(or
individual)
who
arranges purchases and
sales of others and
receives a commission
on each transaction
Earning
of
a
corporation that are
distributed
to
stockholders

3.2
charter 3.2
money market

1.

2.

3.

4.

5.
6.

Money
market
instruments

Short-term obligations;
that
is,
obligations
having a maturity of
one year or less. These
include
U.S.Treasury
bills,
bankers
acceptances,
and
commercial paper.

Money
market fund

A mutual fund that

pools
investors
contributions
and
invests them in various
money
market
instruments

Commercial
paper

Certificate of
deposit
Interbank
loan

An extension of credit
by one bank to another
Short-term obligations;
that
is,
obligations
having a maturity of
one year or less.

Spot

Spot market

IMF-
.

International
Monetary
Fund (IMF)

The market in which an

asset is traded for
immediate delivery also
called the cash market
as opposed to a market
for forward or future
delivery
An international
organization set up in
1944 to super-vice
exchange rates and to
promote orderly
international financial
conditions.
A written promise to pay
a specified sum of
money at a specified
time or on demand,

7.

9.

Short term unsecured

promissory notes issued
by major corporations
of unguestioned credit
standing for borrowing
purposes
A formal receipt issued
by a bank for a specified
amount of money left
with the bank

Money
market
instruments

8.

Promissory
note

;



.

,

.



.

.


;






.



.

1944
,

.

10
.

3.3
charter 3.3

A written, evidencing
the depositing of a
stated sum of money,
usually for a specific
time frame at a
specified rate of
interest. The certificate
must be surrendered to
the issuing bank to
obtain funds.

Savings
certificate

foreign exchange market

1
.

2
.

3
.

3 .4
charter 3.4

Foreign
exchange

Foreign
exchange
rate
Fixed
exchange
rates

Trading or exchanging of
the currencies of other
countries in relation to
one another or to U.S.
currency
The value of a unit
nations money in terms
of another nations
money
An international financial
system in which rates of
exchange between the
values of different
countries currencies are
maintained at agreedupon levels.

2.

Put option

traditional market

1.

Hedging

Put

option

Taking action to
neutralize risk.
An option contract in
which the option buyer
has the right (but not
the obligation ) to sell a
specified quantity of
the underlying asset at
aspecified price until
the expiration date of

.



,


/ /

the option

3.

4.

5.

6.

Call option

Hedger

Futures
contract

An option contract in
which the option has
the right (abut not the
obligation) to buy a
specified guantity of
the expiration date of
the option
One who tries reduce
the risk of loss resulting
from a change in the
price of a particular
asset. In futures
markets, it is someone
who sells a futures
contract while holding
the underlying asset
(short hedger) or
purchases such a
contract in anticipation
of purchasing the
underlying asset (long
hedger).
A standardized
agreement, traded on
an organized futures
exchange, for delivery
of a specific commodity
or security at a
specified price.

part 4

money supply, moneytary policy

2.

3.

, ,

.

4.

1.

.


,

Money supply

Open
market
operations

Monetary
policy

The total amount of

funds available for
spending in the nation
at any point in time.
Short-term
obligations; that is,
obligations having a
maturity of one year
or less.
The general term for
the actions taken by
the Federal Reserve to
control the flow of
money and credit.
An expression of the


4.

Balance
5.

Line of credit

of

payment/

national/
6.

Required
reserve ratio

7.

Required
reserves

8.

Real GNP

9.

12
.

13
.

The theory that a

proportional increase
in the supply of
money leads to a
proportional increase
in the price level

.











.

Quantity theory
of money

inflation

Generally rising price

levels,

()

Gross national
product (GNP)

The total value of

goods and services
produced in the
economy in a given
year.
Graph
of
points
showing combinations
of level of GNP and
inmerest
rates
at
which
liguidity
preference eguals tne
money supply
The position based in
Classical
economics
that an invisible hand
pushes the economy
toward
a
full
employment level of
production at which it
is inherently smable
and that government
efforts
to
affect

10
.
11
.

maximum amount of
credit a bank is willing
to lend to a borrower.
Confirmed lines of
credit
are
made
known
to
the
customer;
guidance
lines of credit are for
the banks internal
use only
a record of payments
that one country
makes to and receives
from all other
foreign countries
The proportion of bank
reserve to deposets
that a bank must hold
according to law
Funds that a bank
must hold in the from
of vault cash or
deposits at the
Federal Reserve to
meet its required
reserve ratio
Gross national product
adjusted for the
effects of inflation

LM curve

monetarism

14
.
15
.
16
.

Monetary base

Money
multiplier
money supply

economic
activity
through
countercyclical
policies
are
unnecessary
and
potentially damaging.
Also associated with
the guantity theory of
money
Total bank reserves
plus currency held by
the nonblank public

The total of currency

outside banks and
demand deposits