A sustained increase in the general price level or a decline in the value or purchasing power of money.
Nominal Interest Rate
Current stated rates of interest paid or earned.
GDP (gross domestic product) adjusted for inflation. Real GDP provides the value of GDP in constant dollars, which is used as an indicator of the volume of the nation's output.
A central bank's actions to influence the availability and cost of money and credit, as a means of helping to promote national economic goals. Tools of monetary policy include open market operations, discount policy and reserve requirements.
The interest rate at which eligible depository institutions may borrow funds, usually for short periods, directly from a Federal Reserve Bank. The law requires the board of directors of each Reserve Bank to establish the discount rate every 14 days subject to the approval of the Board of Governors.
Open Market Operations
Purchases and sales of government securities and certain other securities in the open market, through the Domestic Trading Desk at the Federal Reserve Bank of New York as directed by the Federal Open Market Committee (FOMC), to influence the volume of money and credit in the economy. Purchases inject reserves into the banking system and stimulate growth of money and credit; sales do the opposite.
Requirements set by the Federal Reserve Board of Governors for the amounts that certain financial institutions must set aside in the form of reserves. Reserve requirements act as a control on the expansion of money and credit and may be raised or lowered within limits specified by law (lowering reserve requirements allows more bank lending and money growth; raising requirements, less lending and money growth).
Federal Funds Rate
The federal funds rate is the interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. The rate may vary from depository institution to depository institution and from day to day.
Money owed; also known as liability.
Consumer Price Index
A measure of the average price level of a fixed basket of goods and services purchased by consumers as determined by the Bureau of Labor Statistics. Monthly changes in the CPI represent the rate of inflation. Core CPI excludes volatile components, i.e., food and energy prices.
Everything an individual or household owns within a monetary value.
Earning interest on interest
A business that offers banking and financing services
The end result of something a person intends to awcquire, achive, do, reach, or accomplish
The price on money
The percentage rate paid on money invested or saved
The purchase of assets with the goal of increasing future income
Level of living
The amount of money needed to pau for the necessities and comforts currently enjoyed
Debts or what is owed to others
How quickly and easily and asset can be converted into cash
The amount of an individuals take-home pay after taxes and other deductions have been taken out
Amount of money left when liabilities are subtracted from assets
Net Worth Statement
Describes an individual or family's financial condition on a specified date
The value of the next best alternative that must be forgone
Pay Yourself First
A saving strategy that states ti set aside a predetermined portion of money for saving each time a person is paid before using any of the money for spending
The original amount of money saved or invested
The profit or income generated by saving and investing
The portion of current income not spending on consumption
A paper or electronic document used to record both planned and actual income through expenditures over a period of time
Standard of living
Minimum necessities, comforts, or luxuries thought to be essential
Time Value of Money
Money paid out or received in the future is not equivalent to money paid out or received today
Giving up one thing for another
A measurement of how much a person or household owns once all debts have been paid
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