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AD CURVE: The aggregate demand curve, which is a graphical representation of the relation between aggregate expenditures on real production and the price level, holding all ceteris paribus aggregate demand determinants constant. The aggregate demand, or AD, curve is one side of the graphical presentation of the aggregate market. The other side is occupied by the aggregate supply curve (which is actually two curves, the long-run aggregate supply curve and the short-run aggregate supply curve). The negative slope of the aggregate demand curve captures the inverse relation between aggregate expenditures on real production and the price level. This negative slope is attributable to the interest-rate effect, real-balance effect, and net-export effect.
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MONETARY POLICY: The Federal Reserve System's use of the money supply to stabilize the business cycle. As the nation's central bank, the Federal Reserve System determines the total amount of money circulating around the economy. In principle, the Fed can use three different "tools"--open market operations, the discount rate, and reserve requirements--to manipulate the money supply. In practice, however, the primary tool employed is open market operations. To counter a recession, the Fed would undertake expansionary policy, also termed easy money. To reduce inflation, contractionary policy is the order of the day, and goes by the name tight money. See also | Federal Reserve System | money | business cycle | stabilization policies | central bank | open market operations | discount rate | reserve requirements | Federal Open Market Committee | tight money | easy money | fiscal policy | interest rate | inflation | unemployment | expansionary monetary policy | contractionary monetary policy |
Recommended Citation:MONETARY POLICY, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 9, 2025].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: monetary policy
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LIMITED LIABILITY A condition in which owners of a business are not personally held responsible for the debts created by the business. Corporations are the most noted types of business organizations in which owners have limited liability. Limited liability makes it possible for a business to accumulate large sums of money and thus to take advantage of large scale production. The alternative to limited liability is unlimited liability, a characteristic of proprietorships and partnerships.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales looking to buy either a 200-foot blue garden hose or a video camera with stop action features. Be on the lookout for high interest rates.
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On a typical day, the United States Mint produces over $1 million worth of dimes.
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"All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence. " -- Martin Luther King Jr., civil rights leader
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MC
Marginal Cost
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