Monetary & Fiscal Policy Financial Terms & Definitions

23 terms in this topic

Monetary policy refers to the processes by which a central bank, such as the Federal Reserve, controls the money supply and interest rates to achieve macroeconomic goals like price stability and full employment. Fiscal policy involves government decisions on taxation and spending to influence economic conditions, often used alongside monetary policy to stabilize the economy.

Hawkish vs. dovish In the world of central banking and monetary policy, the terms hawkish and dovish describe the general attitude… Interest on reserve balances (IORB) Interest on reserve balances (IORB) is the interest rate that the Federal Reserve System pays to banks and… Money supply – M1 Money supply – M1 is a measure of the most liquid forms of money in an economy. It… Money supply – M2 Money supply M2 is a broad measure of the total amount of money in an economy. It includes… Money supply – M3 Money supply M3 is a broad measure of the total amount of money circulating in an economy. It… National debt The national debt is the total amount of money that a country’s federal government has borrowed and has… Open market operations Open market operations (OMO) are the primary tool used by the Federal Reserve System to influence the supply… Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… Quantitative tightening (QT) Quantitative tightening (QT) is a contractionary monetary policy tool used by a central bank, like the Federal Reserve,… Reserve requirement The reserve requirement is a central banking regulation that sets the minimum fraction of customer deposits and liabilities… Treasury auction A Treasury auction is the primary method used by the U.S. Department of the Treasury to borrow money…