Question

want to know definition and explanations

Domestic Credit;
B = Res + DC;
Fractional Reserve Banking;
MS = C + Deposits;
B = C + Reserve;
Money Multiplier;
Md = L(i,Y) x P;
P = MS/L(r+π, Y);
Neutrality of Money;
Quantity Equation;
Nominal Exchange Rate;
Types of Exchange Rates;
N(N-1)/2
Arbitrage;
Law of One Price;
Absolute and Relative PPP;
PCAN/PEU > E$/€;
PCAN/PEU < E$/€;
A Currency’s Appreciation and Devaluation;
Joint-Stock Banking;
Moral Hazard;
Private Discount Houses;
1913 Federal Reserve Act;
Glass-Steagall Rules;
Gold Specie Standard;
Gold Exchange Standard;
Gold Bullion Standard;
Price-Specie Flow Model;
Rules of the Game;
Bimetallism;
Gresham’s Law;
Discount Rate;
Gold Standard as a Socially Constructed Institution;
Maintaining Convertibility;
“Beggar – thy – neighbor – devaluation”;

Answer 1

a. Domestic Credit - The domestic credit refers to lending or credit that a country or territory's central bank makes available to the borrowers in the same territory. It includes both the commercial banks and government .

b. Fractional reserve banking - It refers to the banking system in which only a fraction of the bank deposits are available for withdrawal. The main purpose of fractional reserve banking system is to free up capital that can be used to loan out to other parties. Reserves are held as currency in bank, or as balances in the bank accounts at the central bank.

c. Money Multiplier - It refers to change in total money supply / Change in monetary base. It refers to how an initial deposit can lead to bigger final increase in the total money supply.

d.Neutrality of money - It refers to the idea that a change in the stock of money affects only nominal variables in the economy such as prices, wages and exchange rates with no effect on real variables like employment, real GDP and real consumption.