CHAPTER 15

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Base Rate?
The interest rate a bank sets to determine its lending and borrowing rates. Will tend to offer interest rates below the base rate to savers, whilst charging rates above the base rate for borrowers
1 of 10
Credit Crunch?
Recently coined term used to refer to the reduced willingness of financial institutions to lend to households and to one another
2 of 10
Nominal Interest Rates?
Interest rates not adjusted for inflation
3 of 10
Real Interest Rates?
Nominal rate of interest minus the rate of inflation
4 of 10
Monetary Policy Objective?
A target or goal that the Bank of England aims to meet
5 of 10
Policy Instrument?
A tool or method used to try to achieve an objective
6 of 10
Monetary Base Control and Reserve Asset Ratios?
Restrictions imposed by the Bank of England on the ability of high street banks to supply credit and bank deposits
7 of 10
Open Market Operations?
Buying or selling of government bonds in exchange for money to either increase or decrease the money supply
8 of 10
Repo Rate?
Interest rate set by the Monetary Policy Committee of the Bank of England in order to influence inflation. Shirt for 'sale and repurchase' rate
9 of 10
Transmission Mechanism or Monetary Policy?
Process by which a change in interest rates affects aggregate demand and inflation
10 of 10

Other cards in this set

Card 2

Front

Credit Crunch?

Back

Recently coined term used to refer to the reduced willingness of financial institutions to lend to households and to one another

Card 3

Front

Nominal Interest Rates?

Back

Preview of the front of card 3

Card 4

Front

Real Interest Rates?

Back

Preview of the front of card 4

Card 5

Front

Monetary Policy Objective?

Back

Preview of the front of card 5
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