Monetary policy consists of the federal reserves

This preview shows page 1 - 3 out of 3 pages.

Monetary policy consists of the Federal Reserve’s managementof the money supply andinterest rates.The management of the money supply and raising and lowering interest rates by the Federal ReserveBankis calledmonetary policy.Supply and demandDemand refers to the quantity of products that people are willing to buy at different pricesat a specifictime.Quantities of products manufacturers are willing to sell at different pricesis known assupply.On a graph showing both supply and demand curves, theintersection point between the two curvesshowsthe equilibrium price andequilibrium point.The intersection between the supply and demand curves is called theequilibrium point.The market price is determined wherethe supply curve intersects the demand curveThe demand curvefalls from left to right on a graph of the goods and services that consumers are willingto buy at different prices at different times. Shows the relationship between price and the quantity ofitems demanded.
Free marketBuyer and seller negotiate prices for goods and services though supply and demand in a free marketeconomy.Three Key economic indicators: GDP, unemployment rate, price indexesGDP: The total value of final goods and services produced in a country in a given yearcalled grossdomestic product.Unemployment rate: the percent of civilians at least 16 years old who are unemployed and tried to find ajob within the prior four weeks.

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 3 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Fall
Professor
Reck

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture