Abbreviated applications
SSI Annual Statistical Report, 2002
Definition: An SSI application in which all nondisability factors of eligibility are verified before the case is sent for a disability determination.
Ability to pay
Internal Revenue Service (IRS)
Definition: concept of tax fairness that states that people with different amounts of wealth or different amounts of income should pay tax at different rates. Wealth includes assets such as houses, cars, stocks, bonds, and savings accounts. Income includes wages, interest and dividends, and other payments.
Ability-to-pay principle of taxation
Economics: Principles & Practices
Definition: Principal of taxation based on belief that taxes should be paid according to level of income regardless of benefits received
Absence rate
Bureau of Labor Statistics (BLS)
Definition: The ratio of workers with absences to total full-time wage and salary employment. Absences are defined as instances when persons who usually work 35 or more hours per week worked less than 35 hours during the reference week for one of the following reasons: own illness, injury, or medical problems; child-care problems; other family or personal obligations; civic or military duty; and maternity or paternity leave.
Absolute advantage
Economics: Principles & Practices
Definition: Country’s ability to produce more of a given product than can another country
Federal Reserve Bank of Minneapolis
Definition: A person, company or country has an absolute advantage if its output per unit of input of all goods and services produced is higher than that of another person, company or country.
Federal Reserve Bank of San Francisco
Definition: A country has an absolute advantage if its output per unit of input of all goods and services produced is higher than that of another country.
Academic consultants
Federal Reserve Bank of San Francisco
Definition: An advisory group initiated by the Board in the 1960’s to provide a forum for the exchange of views between the Federal Reserve Board and members of the academic community in economics and banking.
Accelerated depreciation
Economics: Principles & Practices
Definition: Shedule that spreads depreciation over fewer years than normal to generate larger tax reductions
Accelerator
Economics: Principles & Practices
Definition: Change in investment spending caused by a change in overall spending
Accidental death and dismemberment
Bureau of Labor Statistics (BLS)
Definition: Policy that pays additional benefits to the beneficiary if the cause of death is found to be accidental. Fractional amounts of the policy will be paid out if the covered employee loses a bodily appendage or sight because of an accident.
Accretion of discount
Federal Reserve Bank of San Francisco
Definition: A straight-line accumulation of capital gains on discount bonds in anticipation of being paid par at maturity.
Accrual accounting
Definition: A system of accounting in which revenues are recorded when earned and outlays are recorded when goods are received or services performed, even though the actual receipt of revenues and payment for goods or services may occur, in whole or in part, at a different time. Compare with cash accounting.
Related Term(s): Cash counting
Accrual method of accounting
Federal Reserve Bank of San Francisco
Definition: See cash method of accounting.
Related Term(s): Cash method of accounting
Accrual method of measuring cost
Office of Management and Budget
Definition: This accounting method records cost when the liability is incurred. As applied to federal employee retirement benefits, cost is recorded when the benefits are earned rather than when they are paid or at some other time.
Acid rain
Economics: Principles & Practices
Definition: Pollution in the form of rainwater mixed with sulfur dioxide to create a mild form of sulfuric acid
Related Term(s): Chained-dollar estimate
Adjusted gross income
Internal Revenue Service (IRS)
Definition: Gross income reduced by certain amounts, such as a deductible IRA contribution or student loan interest.
Adjusted gross income (AGI)
Definition: All income subject to taxation under the individual income tax after subtracting ”above-the-line” deductions, such as certain contributions for individual retirement accounts and alimony payments. Personal exemptions and the standard or itemized deductions are subtracted from AGI to determine taxable income.
Adult
SSI Annual Statistical Report, 2002
Definition: A person who is older than age 21, is aged 18-21 but is not a student, is under 21 and married, or is the head of a household.
Advance appropriation
Congressional Budget Office
Definition: Budget authority provided in an appropriation act that is first available for obligation in a fiscal year after the year for which the appropriation was enacted. The amount of the advance appropriation is included in the budget totals for the fiscal year in which it will become available. See also appropriation act, budget authority, fiscal year, and obligation; compare with forward funding and obligation delay.
Related Term(s): Appropriation act, Budget authority, Fiscal year, Forward funding obligation, Obligation delay
Advance estimate
Bureau of Economic Analysis (BEA)
Definition: The first estimate of gross domestic product (GDP) and its components for a quarter. It is released 25-30 days after the end of the quarter and is based on source data that are incomplete and subject to revision.
Related Term(s): Final estimate, Preliminary estimate
Aged person
SSI Annual Statistical Report, 2002
Definition: A person aged 65 or older.
Agency shop
Economics: Principles & Practices
Definition: Arrangement under which non-union members must pay union dues
Aggregate
Federal Reserve Bank of San Francisco
Definition: Any total (e.g., the gross national product; the sum of monthly sales).
Aggregate demand
Economics: Principles & Practices
Definition: The total value of all goods and services demanded at each and every price level
Congressional Budget Office
Definition: Total purchases of a country’s output of goods and services by consumers, businesses, government, and foreigners during a given period. Compare with domestic demand.
Aggregate demand curve
Economics: Principles & Practices
Definition: Hypothetical curve showing different levels of real GDP that would be purchased at various price levels
Aggregate supply
Economics: Principles & Practices
Definition: The total value of all goods and services that all firms would produce at a specific period of time at various price levels
Aggregate supply curve
Economics: Principles & Practices
Definition: Hypothetical curve showing different levels of real GDP that could be produced at various price levels
Aggregation
Bureau of Labor Statistics (BLS)
Definition: Combining index relatives from one level to the next higher level. The procedure for the International Price Program begins with the aggregation of item level relatives to weight group relatives. The weight group relatives are then aggregated to the classification group relatives. The classification group relatives are then aggregated to the stratum lower relatives which in turn are aggregated up the tree of stratum upper relatives to the All Import or All Export index level.
AGI
Congressional Budget Office
Definition: See adjusted gross income
Related Term(s): Adjusted gross income (AGI)
Agreement corporation
Federal Reserve Bank of Minneapolis
Definition: Corporation chartered by a state to engage in international banking: so named because the corporation enters into an “agreement” with the Fed’s Board of Governors that it will limit its activities to those permitted and Edge Act Corporation.
Federal Reserve Bank of San Francisco
Definition: Corporation chartered by a state to engage in international banking; so named because the corporation enters into an ‘agreement’ with the Board of Governors to limit its activities to those permitted an Edge Act corporation.
All other occupational illnesses
Bureau of Labor Statistics (BLS)
Definition: Examples: Anthrax, brucellosis, infectious hepatitis, malignant and benign tumors, food poisoning, histoplasmosis, coccidioidomycosis.
Allowance
SSI Annual Statistical Report, 2002
Definition: A determination by the Disability Determination Services, an administrative law judge, or the Appeals Council that an applicant meets the medical definition of disability under the law.
Alternative minimum tax
Economics: Principles & Practices
Definition: Personal income tax rate that applies to cases where taxes would otherwise fall below a certain level
Alternative minimum tax (AMT)
Congressional Budget Office
Definition: A tax intended to prevent higher-income taxpayers from excessively reducing their tax liability (the amount they owe) through the use of preferences in the tax code. Taxpayers subject to the AMT are required to recalculate their tax liability on the basis of a more limited set of exemptions, deductions, and tax credits than would normally apply.
Amortization
Federal Reserve Bank of Cleveland
Definition: The process of fully paying off indebtedness by installments of principal and earned interest over a definite time.
Federal Reserve Bank of Minneapolis
Definition: The process of fully paying off indebtedness by installments of principal and earned interest over a definite time.
Federal Reserve Bank of San Francisco
Definition: The process of fully paying off indebtedness by installments of principal and earned interest over a definite time.
Amount due
Internal Revenue Service (IRS)
Definition: Money that taxpayers must pay to the government when the total tax is greater than their total tax payments.
Annual input-output (I-O) accounts
Bureau of Economic Analysis (BEA)
Definition: The first estimate of gross domestic product (GDP) and its components for a quarter. It is released 25-30 days after the end of the quarter and is based on source data that are incomplete and subject to revision.
Related Term(s): Input-output (I-O) accounts
Annual percentage rate – APR
Federal Reserve Bank of San Francisco
Definition: The cost of credit on a yearly basis expressed as a percentage.
Federal Reserve Bank of Cleveland
Definition: The cost of credit on a yearly basis expressed as a percentage.
Federal Reserve Bank of Minneapolis
Definition: The cost of credit on a yearly basis expressed as a percentage.
Appeal
Internal Revenue Service (IRS)
Definition: To call for a review of an IRS decision or proposed adjustment.
Appraisal fee
Federal Reserve Bank of Minneapolis
Definition: The charge for estimating the value of property offered as security.
Federal Reserve Bank of San Francisco
Definition: The charge for estimating the value of property offered as security.
Appreciation
Federal Reserve Bank of Minneapolis
Definition: See currency appreciation.
Federal Reserve Bank of San Francisco
Definition: See currency appreciation.
Related Term(s): Currency appreciation
Appropriation
Office of Management and Budget
Definition: An appropriation provides legal authority for federal agencies to incur obligations and to make payments out of the Treasury for specified purposes. Thirteen regular appropriations bills are considered every year by the Congress and supplemental appropriations are considered from time to time.
Citizen’s Guide to the Federal Budget
Definition: An appropriation is an act of Congress that enables Federal agencies to spend money for specific purposes.
Appropriation act
Congressional Budget Office
Definition: Legislation under the jurisdiction of the House and Senate Committees on Appropriations that provides budget authority for federal programs or agencies. By law, such an act has a particular style and title–for example, ”An act making appropriations for the Department of Defense for the year ending September 30, 2001.” Generally, 13 regular appropriation acts are considered annually to fund the operations of the federal government; the Congress may also consider supplemental or continuing appropriation acts, but each follows the statutory style and title. See also budget authority.
Related Term(s): Budget authority
Appropriations bill
Economics: Principles & Practices
Definition: Legislation earmarking funds for certain purposes
Aquifer
Economics: Principles & Practices
Definition: Underground water-bearing rock formation
Arbitration
Economics: Principles & Practices
Definition: Method of settling a labor-management dispute whereby both sides place their differences before a third party whose decision will be final and binding; can be voluntary or compulsory
ASEAN
Economics: Principles & Practices
Definition: Group of ten Southeast Asian nations working to promote regional cooperation, economic growth, and trade
Assets
Economics: Principles & Practices
Definition: Properties, possessions, and claims on others; usually listed as entries on a balance sheet
Auction
Federal Reserve Bank of San Francisco
Definition: A method of determining price and interest.
Autarky
Federal Reserve Bank of Cleveland
Definition: National economic self-sufficiency or independence.
Authorization
Office of Management and Budget
Definition: An authorization is an act of the Congress that establishes or continues a federal program or agency, and sets forth the guidelines to which it must adhere.
Citizen’s Guide to the Federal Budget
Definition: An authorization is an act of Congress that establishes or continues a Federal program or agency, and sets forth the guidelines to which it must adhere.
Authorization act
Congressional Budget Office
Definition: Legislation under the jurisdiction of a committee other than the House and Senate Committees on Appropriations that establishes or continues the operation of a federal program or agency, either indefinitely or for a specified period of time. An authorization act may suggest a level of budget authority needed to fund the program or agency, which then is provided in a future appropriation act. However, for some programs, the authorization itself may provide the budget authority. See also budget authority.
Related Term(s): Budget authority
Authorized IRS e-file provider
Internal Revenue Service (IRS)
Definition: A business authorized by the IRS to participate in the IRS e-file Program. The business may be a sole proprietorship, a partnership, a corporation, or an organization. Authorized IRS e-file Providers include Electronic Return Originators (EROs), Transmitters, Intermediate Service Providers, and Software Developers. These categories are not mutually exclusive. For example, an ERO can at the same time, be a Transmitter, a Software Developer, or an Intermediate Service Provider, depending on the function being performed.
Automated clearinghouse – ACH
Federal Reserve Bank of San Francisco
Definition: Electronic clearing and settlement system for exchanging electronic transactions among participating depository institutions; such electronic transactions are substitutes for paper checks and are typically used to make recurring payments such as payroll or loan payments. The Federal Reserve Banks operate an automated clearinghouse, as do some private-sector firms.
Automated clearinghouse – ACH
Federal Reserve Bank of Cleveland
Definition: A computer-based clearing and settlement operation, often operated by a Federal Reserve Bank, established for the exchange of electronic transactions among participating depository institutions. Such electronic transactions can be substituted for paper checks used to make recurring payments such as payroll or preauthorized insurance premiums. The U.S. Treasury uses the ACH extensively to pay certain obligations of the government.
Federal Reserve Bank of Minneapolis
Definition: Electronic clearing and settlement system for exchanging electronic transactions among participating depository institutions; such electronic transactions are substitutes for paper checks and are typically used to make recurring payments such as payroll or loan payments. The Federal Reserve Banks operate an automated clearinghouse, as do some private sector firms.
Automated teller machine (ATM)
Federal Reserve Bank of Minneapolis
Definition: Computer-controlled terminal located on the premises of financial institutions or elsewhere, through which customers may make deposits, withdrawals or other transactions as they would through a bank teller. Other terms sometimes used to describe such terminals are customer-bank communications terminal (CBCT) and remote service unit (RSU). Groups of banks sometimes share ATM networks located throughout a region of the country that may include portions of several states.
Automated teller machine (ATM)
Federal Reserve Bank of San Francisco
Definition: Computer-controlled terminals located on the premises of financial institutions or elsewhere, through which customers may make deposits, withdrawals, or other transactions as they would through a bank teller. Other terms sometimes used to describe such terminals are customer-bank communications terminal (CBC) and remote service unit (RSU). Groups of banks sometimes share ATM networks located throughout a region of the country that may include portions of several states.
Automatic stabilizer
Economics: Principles & Practices
Definition: Program that automatically provides government benefits during an economic downturn to offset a change in people’s incomes; unemployment insurance, entitlement programs
Automatic transfer service (ATS) account
Federal Reserve Bank of Cleveland
Definition: A depositor’s savings account from which funds may be transferred automatically to the same depositor’s checking account to cover a check written or to maintain a minimum balance.
Federal Reserve Bank of Minneapolis
Definition: A depositor’s savings account from which funds may be transferred automatically to the same depositor’s checking account to cover a check written or to maintain a minimum balance.
Automatic transfer service account – ATS
Federal Reserve Bank of San Francisco
Definition: A depositor’s savings account from which funds may be transferred automatically to the same depositor’s checking account to cover a check written or to maintain a minimum balance.
Automation
Economics: Principles & Practices
Definition: Production with mechanical or other processes that reduces the need for workers
Auxiliary benefit (OASDI)
SSI Annual Statistical Report, 2002
Definition: Monthly benefit payable to a spouse or a child of a retired or disabled worker, or to a survivor of a deceased worker.
Average tax rate
Economics: Principles & Practices
Definition: Total taxes paid divided by the total taxable income
Award
SSI Annual Statistical Report, 2002
Definition: An administrative determination that an individual is entitled to receive monthly benefits.
Births, out of wedlock
U.S. Census Bureau
Definition: Out-of-wedlock births are defined as births occurring in the 12-month period preceding the survey date to women who were currently divorced, widowed, or never married at the time of the interview.
Birth cohort
U.S. Census Bureau
Definition: A birth cohort is a group of people who were born in a specified calendar period.
Barter economy
Economics: Principles & Practices
Definition: Moneyless economy that relies on trade or barter
Baby boom
Economics: Principles & Practices
Definition: Historically high birthrate years in the United States from 1946 to 1964
Backward-looking interest rate rule
Federal Reserve Bank of Cleveland
Definition: A variant of the Taylor rules in which the funds rate responds to movements in past variables (such as yesterday’s inflation).
Balance of payments
Bureau of Economic Analysis (BEA)
Definition: Record of transactions between U.S. residents and foreign residents during a given time period. Includes transactions in goods, services, income, assets, and liabilities. It is broken down into the current account (international), capital account (international), and financial account (international).
Economics: Principles & Practices
Definition: Difference between money paid to, and received from, other nations in trade; balance on current account includes goods and services, merchandise trade balance counts only goods
Federal Reserve Bank of Cleveland
Definition: An accounting statement for recording all payments that have a direct effect on the movement of funds among nations. The statement shows over a specific time period the sum of transactions of individuals, businesses, and government agencies located in one nation, against those of all other nations.
Federal Reserve Bank of Minneapolis
Definition: An accounting statement of the money value of international transactions between one nation and the rest of the world over a specific time period. The statement shows the sum of transactions of individuals, businesses and government agencies located in one nation, against those of all other nations.
Federal Reserve Bank of San Francisco
Definition: An accounting statement of the money value of international transactions between one nation and the rest of the world over a specific time period. The statement shows the sum of transactions of individuals, businesses, and government agencies located in one nation, against those of all other nations.
Balance of trade
Federal Reserve Bank of Cleveland
Definition: That part of a nation’s balance of payments dealing with imports and exports, that is trade in goods and services, over a given period. If exports of goods exceed imports, the trade balance is said to be ”favorable”; if imports exceed exports, the trade balance if said to be ”unfavorable.”
Federal Reserve Bank of Minneapolis
Definition: That part of a nation’s balance of payments dealing with imports and exports, that is trade in goods and services, over a given period. If exports of goods exceed imports, the trade balance is said to be favorable; if imports exceed exports, the trade balance if said to be unfavorable.
Federal Reserve Bank of San Francisco
Definition: That part of a nation’s balance of payments dealing with imports and exports, that is trade in goods and services, over a given period. If exports of goods exceed imports, the trade balance is said to be ‘favorable’; if imports exceed exports, the trade balance if said to be ‘unfavorable.’
Balance on current account
Bureau of Economic Analysis (BEA)
Definition: Record of net receipts or payments on goods, services, income, and unilateral current transfers. Current transfers include U.S. government grants to foreign countries, private remittances, and other current transfers.
Related Term(s): Balance on goods, Balance on goods and services
Balance on current account, national income and product accounts
Bureau of Economic Analysis (BEA)
Definition: Current receipts from the rest of the world less current payments to the rest of the world, formerly called ”net foreign investment.” Current receipts equal exports of goods and services plus income receipts from the rest of the world; current payments are the sum of imports of goods and services, income payments to the rest of the world, and current taxes and transfer payments to the rest of the world (net).
Balance on goods
Bureau of Economic Analysis (BEA)
Definition: Record of the difference between exports of goods and imports of goods.
Related Term(s): Balance on current account, Balance on goods and services
Balance on goods and services
Bureau of Economic Analysis (BEA)
Definition: Record of the difference between exports of goods and services and imports of goods and services. In the broad sense, this balance is conceptually equal to net exports of goods and services, which is a component of gross domestic product (GDP).
Related Term(s): Balance on current account, Balance on goods
Balance sheet
Economics: Principles & Practices
Definition: Condensed statement showing assets, liabilities, and net worth of an economic unit
Balanced budget
Economics: Principles & Practices
Definition: Annual budget in which expenditures equal revenues
Office of Management and Budget
Definition: A balanced budget occurs when total receipts equal total outlays for a fiscal year.
Citizen’s Guide to the Federal Budget
Definition: A balanced budget occurs when total revenues equal total outlays for a fiscal year.
Balanced budget amendment
Economics: Principles & Practices
Definition: State or federal constitutional amendment requiring government to spend no more than it collects in taxes and other revenues, excluding borrowing
Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings, or GRH)
Citizen’s Guide to the Federal Budget
Definition: The Balanced Budget and Emergency Deficit Control Act of 1985 was designed to end deficit spending. It set annual deficit targets for five years, declining to a balanced budget in 1991. If necessary, it required across-the-board cuts in programs to comply with the deficit targets. It was never fully implemented.
Balanced Budget and Emergency Deficit Control Act of 1985 (Public Law 99-177)
Definition: Referred to in CBO’s reports as the Deficit Control Act, it was originally known as Gramm-Rudman-Hollings. The law established specific deficit targets and a sequestration procedure to reduce spending if those targets were exceeded. The Deficit Control Act has been amended and extended several times–most significantly by the Budget Enforcement Act of 1990 and most recently by the Balanced Budget Act of 1997. See also discretionary spending limits, pay-as-you-go, and sequestration.
Related Term(s): Discretionary spending limits (or caps), Pay-as-you-go (PAYGO), Sequestration
Balloon payment
Federal Reserve Bank of Cleveland
Definition: A large extra payment that may be charged at the end of a loan or lease.
Federal Reserve Bank of Minneapolis
Definition: A large extra payment that may be charged at the end of a loan or lease.
Federal Reserve Bank of San Francisco
Definition: A large extra payment that may be charged at the end of a loan or lease.
Bank for International Settlements – BIS
Federal Reserve Bank of San Francisco
Definition: The BIS, located in Basle, Switzerland, was established in 1930 to administer the post-World War I reparations agreements. Since the 1960s, the BIS has evolved into an important international monetary institution, and has provided a forum in which central bankers meet and consult on a monthly basis. As an independent financial organization, the BIS performs a variety of banking, trustee, and agent functions, primarily with central banks.
Bank for International Settlements (BIS)
Federal Reserve Bank of Cleveland
Definition: The BIS, located in Basle, Switzerland, was established in 1930 to administer the post-World War I reparations agreements. Since the 1960s, the BIS has evolved into an important international monetary institution, and has provided a forum in which central bankers meet and consult on a monthly basis. As an independent financial organization, the BIS performs a variety of banking, trustee, and agent functions, primarily with central banks.
Federal Reserve Bank of Minneapolis
Definition: International organization established in 1930 and based in Basle, Switzerland, that serves as a forum for central banks collecting information, developing analyses and cooperating on a wide range of policy-related matters.
Bank holding company
Federal Reserve Bank of Cleveland
Definition: A company that owns or controls one or more banks. The Board of Governors has responsibility for regulating and supervising bank holding companies, such as approving acquisitions and mergers and inspecting the operations of such companies. This authority applies even though a bank owned by a holding company may be under the primary supervision of the Comptroller of the Currency or the FDIC.
Bank holding company – BHC
Federal Reserve Bank of San Francisco
Definition: Company that owns, or has controlling interest in, one or more banks. A company that owns more than one bank is known as a multibank holding company. A bank holding company may also own another bank holding company, which in turn owns or controls a bank; the company at the top of the ownership chain is called the top holder. The Board of Governors is responsible for regulating and supervising bank holding companies, even if the bank owned by the holding company is under the primary supervision of a different federal agency (the Comptroller of the Currency or the Federal Deposit Insurance Corporation).
Bank holiday
Economics: Principles & Practices
Definition: Brief period during which all banks or depository institutions are closed to prevent bank runs
Bank note
Federal Reserve Bank of Minneapolis
Definition: A term used synonymously with paper money or currency issued by a bank. Notes are, in effect, a promise to pay the bearer on demand the amount stated on the face of the note. Today, only the Federal Reserve Banks are authorized to issue bank notes, i.e. Federal Reserve notes, in the United States.
Federal Reserve Bank of San Francisco
Definition: A term used synonymously with paper money or currency issued by a bank. Notes are, in effect, a promise to pay the bearer on demand the amount stated on the face of the note. Today, only the Federal Reserve Banks are authorized to issue bank notes, i.e. Federal Reserve notes, in the United States.
Bank panic
Federal Reserve Bank of Cleveland
Definition: A series of unexpected cash withdrawals caused by a sudden decline in depositor confidence or fear that a bank will be closed by the chartering agency. That is, many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business. (Same as bank run)
Federal Reserve Bank of San Francisco
Definition: A series of unexpected cash withdrawals caused by a sudden decline in depositor confidence or fear that the bank will be closed by the chartering agency, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business.
Related Term(s): Bank run
Bank regulation
Federal Reserve Bank of Cleveland
Definition: The formulation and issuance by authorized agencies of specific rules or regulations, under governing law, for the conduct and structure of banking.
Federal Reserve Bank of Minneapolis
Definition: The formulation and issuance by authorized agencies of specific rules or regulations, under governing law, for the conduct and structure of banking.
Federal Reserve Bank of San Francisco
Definition: The formulation and issuance by authorized agencies of specific rules or regulations, under governing law, for the conduct and structure of banking.
Bank run
Federal Reserve Bank of Cleveland
Definition: A series of unexpected cash withdrawals caused by a sudden decline in depositor confidence or fear that a bank will be closed by the chartering agency. That is, many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business. (Same as bank panic)
Federal Reserve Bank of San Francisco
Definition: A series of unexpected cash withdrawals caused by a sudden decline in depositor confidence or fear that the bank will be closed by the chartering agency, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business.
Related Term(s): Bank run
Bank run (bank panic)
Federal Reserve Bank of Minneapolis
Definition: A series of unexpected cash withdrawals caused by a sudden decline in depositor confidence or fear that the bank will be closed by the chartering agency, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business.
Bank supervision
Federal Reserve Bank of Cleveland
Definition: Concern of financial regulators with the safety and soundness of individual banks, involving the general and continuous oversight of the activities of this industry to ensure that banks are operated prudently and in accordance with applicable statutes and regulations.
Federal Reserve Bank of Minneapolis
Definition: Oversight of individual banks to ensure that they are operated prudently and in accordance with applicable statutes and regulations.
Federal Reserve Bank of San Francisco
Definition: Oversight of individual banks to ensure that they are operated prudently and in accordance with applicable statutes and regulations..
Bankers acceptance
Federal Reserve Bank of Cleveland
Definition: Bankers acceptances are negotiable time drafts, or bills of exchange, that have been accepted by a bank which, by accepting, assumes the obligation to pay the holder of the draft the face amount of the instrument on the maturity date specified. They are used primarily to finance the export, import, shipment, or storage of goods.
Federal Reserve Bank of San Francisco
Definition: Bankers acceptances are negotiable time drafts, or bills of exchange, that have been accepted by a bank that, by accepting, assumes the obligation to pay the holder of the draft the face amount of the instrument on the maturity date specified. They are used primarily to finance the export, import, shipment, or storage of goods.
Federal Reserve Bank of Minneapolis
Definition: Banker’s acceptances are negotiable time drafts, or bills of exchange, that have been accepted by a bank which, by accepting, assumes the obligation to pay the holder of the draft the face amount of the instrument on the maturity date specified. They are used primarily to finance the export, import, shipment or storage of goods.
Bankruptcy
Economics: Principles & Practices
Definition: Court-granted permission to an individual or business to cease or delay payment on some or all debts for a limited amount of time
Bankwire
Federal Reserve Bank of San Francisco
Definition: An electronic communications network owned by an association of banks and used to transfer messages between subscribing banks. Bankwire also offers a clearing service called Cashwire that includes a settlement facility.
Barter economy
Economics: Principles & Practices
Definition: Moneyless economy that relies on trade or barter
Base period
Bureau of Labor Statistics (BLS)
Definition: A point in time used as a reference point for comparison with some later period. For example, in the theory of price indices the Laspeyres price index uses the earlier of the two years over which prices are compared for purposes of weighting the relative price changes. This earlier year is then the base period and the price index is a base period weighted index.
Bureau of Economic Analysis (BEA)
Definition: The period from which the weights for a measurement series are derived. The national income and product accounts (NIPAs) currently use the year 2000 as the base period.
Base year
Economics: Principles & Practices
Definition: Year serving as point of comparison for other years in a price index or other statistical measure
Baseline
Definition: A benchmark for measuring the budgetary effects of proposed changes in federal revenues or spending. For purposes of the Deficit Control Act, the baseline is the projection of current-year levels of new budget authority, outlays, revenues, and the surplus or deficit into the budget year and out-years based on current laws and policies, calculated in conformance with the rules set forth in section 257 of that act. See also fiscal year.
Related Term(s): Fiscal year
Basis point
Definition: One-hundredth of a percentage point. (For example, the difference between interest rates of 10.5 percent and 10.0 percent is 50 basis points.)
Bear market
Economics: Principles & Practices
Definition: Period during which stock market prices move down for several months or years in a row
Beige Book
Federal Reserve Bank of Minneapolis
Definition: Eight times a year, prior to FOMC meetings, each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key businessmen, economists, market experts and other sources. The Beige Book summarizes this information by District and sector.
Benchmark
Federal Reserve Bank of Cleveland
Definition: A standard against which other measures may be judged or compared. In this case, the benchmark is a more complete source of employment data—the records submitted by companies to state unemployment insurance agencies.
Benchmark input-output (I-O) accounts
Bureau of Economic Analysis (BEA)
Definition: Statistical description–presented in a make table, use table, direct requirements table, and total requirements tables–of the production of goods and services and the transaction flows of goods and services between different industries and to different components of final uses. These accounts are prepared every five years, coinciding with economic census years.
Related Term(s): Annual input-output (I-O) accounts, Input-output (I-O) accounts
Benefit incidence
Bureau of Labor Statistics (BLS)
Definition: A measure of the availability of a benefit. The National Compensation Survey presents data on the percent of workers with access to, and participate in employee benefits. Access is defined as the percent of workers in an occupation who are offered a benefit. For example, an employee may have access to an employer sponsored fitness center, but may or may not use it. Participation is defined as the percent of workers that actually participate in the benefit (meeting any service requirements, and if required, paying a share of the cost). The National Compensation Survey publishes participation data for Insurance and Retirement benefits.
Benefit principle of taxation
Economics: Principles & Practices
Definition: Belief that taxes should be paid according to benefits received regardless of level of income
Benefits
Bureau of Labor Statistics (BLS)
Definition: Non-wage compensation provided to employees. The National Compensation Survey groups benefits into five categories: Paid leave (vacations, holidays, sick leave); supplementary pay (premium pay for overtime and work on holidays and weekends, shift differentials, nonproduction bonuses); retirement (defined benefit and defined contribution plans); insurance (life insurance, health benefits, short-term disability, and long-term disability insurance) and legally required benefits (Social Security and Medicare, Federal and State unemployment insurance taxes, and workers’ compensation).
Benefits received
Internal Revenue Service (IRS)
Definition: A concept of tax fairness that states that people should pay taxes in proportion to the benefits they receive from government goods and services.
Better Business Bureau
Economics: Principles & Practices
Definition: Business-sponsored nonprofit organization providing information on local companies to consumers
Bilateralism
Federal Reserve Bank of San Francisco
Definition: An international policy having as its objective the achievement of particular balances of trade between two nations by means of discriminatory tariffs, exchange, or other controls. The initiative is usually taken by the country having an ‘unfavorable’ balance of trade. Extensive bilateralism results in a shift of international trade away from channels that would result from the principle of comparative advantage. See also multilateralism.
Bill
Federal Reserve Bank of San Francisco
Definition: A short-term direct obligation of the U.S. Treasury (13, 26, or 52 weeks’ maturity). See also note and bond.
Bill consolidation loan
Economics: Principles & Practices
Definition: Popular type of consumer loan used to pay off multiple existing loans
Birth cohort
U.S. Census Bureau
Definition: A birth cohort is a group of people who were born in a specified calendar period.
Births, out of wedlock
U.S. Census Bureau
Definition: Out-of-wedlock births are defined as births occurring in the 12-month period preceding the survey date to women who were currently divorced, widowed, or never married at the time of the interview.
Black market
Economics: Principles & Practices
Definition: Market in which economic products are sold illegally
Blind
SSI Annual Statistical Report, 2002
Definition: ”Blindness,” for Social Security purposes, means either central visual acuity of 20/200 or less in the better eye with the use of a correcting lens or a limitation in the fields of vision so that the widest diameter of the visual field subtends an angle of 20 degrees or less (tunnel vision).
Blind work expenses (BWE)
SSI Annual Statistical Report, 2002
Definition: Permits the exclusion of any earned income of a blind person that is used to meet expenses reasonably attributable to earning the income.
Blue Chip consensus forecast
Congressional Budget Office
Definition: The average of about 50 economic forecasts compiled and published monthly by Aspen Publishers, Inc.
Blue collar and service occupations (National Compensation Survey)
Bureau of Labor Statistics (BLS)
Definition: Includes precision production, craft, and repair occupations; machine operators and inspectors; transportation and moving occupations; handlers, equipment cleaners, helpers, and laborers; and service occupations.
Board of Governors
Federal Reserve Bank of Cleveland
Definition: Governmental agency of the Federal Reserve System, located in Washington, D.C., and composed of seven members who are appointed by the president of the United States and confirmed by the Senate. The Board is responsible for domestic and international economic analysis; with other components of the System, for the conduct of monetary policy; for supervision and regulation of certain banking organizations; for operation of much of the nation’s payments system; and for administration of most of the nation’s laws that protect consumers in credit transactions.
Federal Reserve Bank of Minneapolis
Definition: Central, governmental agency of the Federal Reserve System, located in Washington, D.C., and composed of seven members who are appointed by the President and confirmed by the Senate. The Board of Governors is responsible for domestic and international economic analysis; with other components of the System, for the conduct of monetary policy; for supervision and regulation of certain banking organizations; for operation of much of the nation’s payments system; and for administration of most of the nation’s laws that protect consumers in credit transactions.
Federal Reserve Bank of San Francisco
Definition: Central governmental agency of the Federal Reserve System, located in Washington, DC, and composed of seven members who are appointed by the President and confirmed by the Senate. The Board is responsible for domestic and international economic analysis with other components of the System; for the conduct of monetary policy; for supervision and regulation of certain banking organizations; for operation of much of the nation’s payments system; and for administration of most of the nation’s laws that protect consumers in credit transactions.
Bond
Economics: Principles & Practices
Definition: Formal contract to repay borrowed money and interest on the borrowed money at regular future intervals
Federal Reserve Bank of San Francisco
Definition: A long-term obligation of the U.S. Treasury (more than 10 years’ maturity). See also bill and note.
Bonus
Internal Revenue Service (IRS)
Definition: Compensation received by an employee for services performed. A bonus is given in addition to an employee’s usual compensation.
Book depreciation
Congressional Budget Office
Definition: See depreciation.
Related Term(s): Depreciation
Book profits
Congressional Budget Office
Definition: Profits calculated using book (or tax) depreciation and standard accounting conventions for inventories. Different from economic profits, book profits are referred to as ”profits before tax” in the national income and product accounts. See also depreciation, economic profits, and national income and product accounts.
Related Term(s): Depreciation, Economic profits, National income and product accounts (NIPAs)
Book-entry
Federal Reserve Bank of Cleveland
Definition: One form in which Treasury and certain government agency securities are held. Book-entry form consists of an entry on the records of the U.S. Treasury Department, a Federal Reserve Bank, or a financial institution.
Book-entry securities
Federal Reserve Bank of Minneapolis
Definition: Securities that are recorded in electronic records, called book entries, rather than as paper certificates. Ownership of U.S. government book-entry securities is transferred over Fedwire.
Boycott
Economics: Principles & Practices
Definition: Protest in the form of a refusal to buy, including attempts to convince others to join
Break-even point
Economics: Principles & Practices
Definition: Production needed if the firm is to recover its costs; production level where total cost equals total revenue
Bretton Woods Conference
Federal Reserve Bank of Minneapolis
Definition: The name commonly given to the United Nations Monetary and Financial Conference, held (July 1-22, 1944) at Bretton Woods, N.H. The conference resulted in the creation of the International Monetary Fund, to promote international monetary cooperation, and of the International Bank for Reconstruction and Development. By December 1945, the required number of governments had ratified the treaties creating the two organizations, and by the summer of 1946 they had begun operation.
Bretton Woods system
Federal Reserve Bank of Cleveland
Definition: A system of fixed exchange rates across nations. It resembled the gold standard, which preceded it. Unlike a gold standard, in which the values of all currencies are tied directly to the price of gold, under Bretton Woods, all currency values were tied at a given exchange rate to the U.S. dollar. The dollar was then fixed in terms of gold (initially at $35 per ounce). The system was supported by IMF charter and lasted from 1945 to 1973. The immediate causes of the system’s demise were persistent U.S. balance-of-payment deficits and the reluctance of the United States to devalue, which led to speculative attacks against the U.S. dollar. See also gold standard and balance of payments.
Related Term(s): Balance of payments
Broker-dealer
Federal Reserve Bank of Cleveland
Definition: Any person, other than a bank, engaged in the business of buying or selling securities on its own behalf or for others.
Federal Reserve Bank of Minneapolis
Definition: Any person, other than a bank, engaged in the business of buying or selling securities on its own behalf or for others.
Federal Reserve Bank of San Francisco
Definition: Any person, other than a bank, engaged in the business of buying or selling securities on her or his own behalf for others.
Brokers’ loans
Federal Reserve Bank of Cleveland
Definition: Money borrowed by brokers from banks for uses such as financing specialists’ inventories of stock, the underwriting of new issues of corporate and municipal securities, and customer margin accounts.
Federal Reserve Bank of Minneapolis
Definition: Money borrowed by brokers from banks for uses such as financing specialists’ inventories of stock, the underwriting of new issues of corporate and municipal securities, and customer margin accounts.
Budget authority
Definition: Authority provided by law to incur financial obligations that will result in immediate or future outlays of federal government funds. Budget authority may be provided in an appropriation act or authorization act and may take the form of authority to obligate offsetting collections or receipts. Offsetting collections and receipts are classified as negative budget authority. See also appropriation act, authorization act, offsetting collections, offsetting receipts, and outlays.
Related Term(s): Appropriation act, Authorization act, Offsetting collections, Offsetting receipts, Outlays
Budget authority
Office of Management and Budget
Definition: Budget authority is the authority provided by law to incur financial obligations that will result in outlays.
Citizen’s Guide to the Federal Budget
Definition: Budget authority is what the law authorizes, or allows, the Federal Government to spend for programs, projects, or activities.
Budget Enforcement Act (BEA) of 1990
Office of Management and Budget
Definition: The BEA is a recently expired law that was designed to limit discretionary spending while ensuring that any new entitlement program or tax cut did not increase deficits. It set annual limits on spending.
Citizen’s Guide to the Federal Budget
Definition: The BEA is the law that was designed to limit discretionary spending while ensuring that any new entitlement program or tax cuts did not make the deficit worse. It set annual limits on total discretionary spending and created ”pay-as-you-go’’ rules for any changes in entitlements and taxes (see ”pay-as-you-go’’).
Budget function
Congressional Budget Office
Definition: One of 20 broad categories into which budgetary resources are grouped so that all budget authority and outlays can be presented according to the national interests being addressed. There are 17 broad budget functions, including national defense, international affairs, energy, agriculture, health, income security, and general government. Three other functions–net interest, allowances, and undistributed offsetting receipts–are included to complete the budget. See also net interest and offsetting receipts.
Related Term(s): Net interest, Offsetting receipts
Budget resolution
Office of Management and Budget
Definition: The budget resolution is the annual framework that the Congress uses to set targets for total, discretionary and mandatory spending, total revenues, and the deficit, as well as allocations within the spending targets. These targets guide the appropriations committees’ deliberations. A budget resolution does not become law and is not binding on the Executive Branch.
Congressional Budget Office
Definition: A concurrent resolution, adopted by both Houses of Congress, that sets forth a Congressional budget plan for the budget year and at least four out-years. The plan consists of spending and revenue targets with which subsequent appropriation acts and authorization acts that affect revenues and direct spending are expected to comply. The targets established in the budget resolution are enforced in each House of Congress through procedural mechanisms set out in law and the rules of each House. See also appropriation act, authorization act, direct spending, fiscal year, and revenues.
Citizen’s Guide to the Federal Budget
Definition: The budget resolution is the annual framework within which Congress makes its decisions about spending and taxes. This framework includes targets for total spending, total revenues, and the deficit, as well as allocations, within the spending target, for discretionary and mandatory spending.
Budgetary resources
Congressional Budget Office
Definition: All sources of authority provided to federal agencies permitting them to incur financial obligations, including new budget authority, unobligated balances, direct spending authority, and obligation limitations. See also budget authority, direct spending, obligation limitation, and unobligated balances.
Related Term(s): Budget authority, Direct spending, Obligation limitation, Unobligated balances
Bull market
Economics: Principles & Practices
Definition: Period during which stock market prices move up for several months or years in a row
Bundesbank
Economics: Principles and Practices
Definition: Established in 1875, the central bank of the Federal Republic of Germany.
Bureau of Labor Statistics – BLS
Federal Reserve Bank of San Francisco
Definition: A research agency of the U.S. Department of Labor; it compiles statistics on hours of work, average hourly earnings, employment and unemployment, consumer prices, and many other variables.
Federal Reserve Bank of Cleveland
Definition: An independent agency within the U.S. Department of Labor that serves as the principal fact-finding agency for the federal government in the field of labor economics. The BLS collects, analyzes, and disseminates statistical labor information to Congress, federal agencies, state and local governments, business, and labor groups.
Federal Reserve Bank of Minneapolis
Definition: A research agency of the U.S. Department of Labor; it compiles statistics on hours of work, average hourly earnings, employment and unemployment, consumer prices and many other variables.
Business
Internal Revenue Service (IRS)
Definition: A continuous and regular activity that has income or profit as its primary purpose.
Business current transfer payments (net)
Bureau of Economic Analysis (BEA)
Definition: Net payments by businesses to persons, government, and the rest of the world for which no current services are performed.
Related Term(s): Business current transfer payments to government (net), Business current transfer payments to persons (net), Business current transfer payments to the rest of the world (net)
Business current transfer payments to government (net)
Bureau of Economic Analysis (BEA)
Definition: Consists of payments to the Federal government in the form of premiums for deposit insurance, fees for regulatory and inspection activities, and fines; payments to state and local governments in the form of fines, tobacco settlements, and donations; and net insurance settlements paid to governments as policyholders.
Related Term(s): Business current transfer payments (net), Business current transfer payments to persons (net), Business current transfer payments to the rest of the world (net)
Business current transfer payments to persons (net)
Bureau of Economic Analysis (BEA)
Definition: Consists of net insurance settlements and income payments by businesses to persons for which no current services are performed.
Related Term(s): Business current transfer payments (net), Business current transfer payments to government (net), Business current transfer payments to the rest of the world (net)
Business current transfer payments to the rest of the world (net)
Bureau of Economic Analysis (BEA)
Definition: Net insurance settlements paid to the rest of the world as policyholders. Excludes taxes paid by domestic corporations to foreign governments.
Related Term(s): Business current transfer payments (net), Business current transfer payments to government (net), Business current transfer payments to persons (net)
Business cycle
Economics: Principles & Practices
Definition: Systematic changes in real GDP marked by alternating periods of expansion and contraction
Congressional Budget Office
Definition: Fluctuations in overall business activity accompanied by swings in the unemployment rate, interest rates, and corporate profits. Over a business cycle, real activity rises to a peak (its highest level during the cycle), then falls until it reaches a trough (its lowest level following the peak), whereupon it starts to rise again, defining a new cycle. Business cycles are irregular, varying in frequency, magnitude, and duration. (NBER)
Business fixed investment
Congressional Budget Office
Definition: Spending by businesses on structures, equipment, and software. Such investment is labeled ”fixed” to distinguish it from investment in inventories.
Business fluctuation
Economics: Principles & Practices
Definition: Changes in real GDP marked by alternating periods of expansion and contraction that occur on a less than systematic basis
Business sector
Bureau of Economic Analysis (BEA)
Definition: All corporate and noncorporate private entities organized for profit and certain other entities that are treated as businesses in the national income and product accounts (NIPAs), including mutual financial institutions, private noninsured pension funds, cooperatives, nonprofit organizations that primarily serve businesses, Federal Reserve banks, federally sponsored credit agencies, and government enterprises.
Related Term(s): General government sector, Households and institutions sector
Business, professional, and technical services transactions (BPT)
Bureau of Economic Analysis (BEA)
Definition: Transactions covering a wide range of private services sold to or purchased from foreigners, such as advertising, telecommunications, computer and data processing services, and accounting and legal services.
Buydown
Federal Reserve Bank of Cleveland
Definition: A lump sum payment made to the creditor by the borrower or by a third party to reduce the amount of some or all of the consumer’s periodic payments to repay the indebtedness.
Federal Reserve Bank of Minneapolis
Definition: A lump sum payment made to the creditor by the borrower or by a third party to reduce the amount of some or all of the consumer’s periodic payments to repay the indebtedness.
Federal Reserve Bank of San Francisco
Definition: A lump sum payment made to the creditor by the borrower or by a third party to reduce the amount of some or all of the consumer’s periodic payments to repay the indebtedness.
California Economic Development Lending Initiative – CEDLI
Call option
Cap
Office of Management and Budget
Definition: A “cap’’ is a legal limit on annual discretionary spending. See also discretionary spending.
Citizen’s Guide to the Federal Budget
Definition: A ”cap” is a legal limit on annual discretionary spending.
Related Term(s): Discretionary spending
Capacity utilization
Capacity utilization rate
Definition: The seasonally adjusted output of the nation’s factories, mines, and electric and gas utilities expressed as a percentage of their capacity to produce output. The capacity of a facility is the greatest output it can maintain with a normal work pattern. (FRB)
Capital
Economics: Principles & Practices
Definition: Tools, equipment, and factories used in the production of goods and services; one of four factors of production
Definition: Physical capital is land and the stock of products set aside to support future production and consumption. In the national income and product accounts, private capital consists of business inventories, producers’ durable equipment, and residential and nonresidential structures. Financial capital is funds raised by governments, individuals, or businesses by incurring liabilities such as bonds, mortgages, or stock certificates. Human capital is the education, training, work experience, and other attributes that enhance the ability of the labor force to produce goods and services. Bank capital is the sum advanced and put at risk by the owners of a bank; it represents the first ”cushion” in the event of loss, thereby decreasing the willingness of the owners to take risks in lending. See also consumption and national income and product account.
Capital account (international)
Bureau of Economic Analysis (BEA)
Definition: Record of capital transfers between U.S. residents and foreign residents, such as debt forgiveness and migrants’ transfers, and acquisitions and disposals of nonproduced nonfinancial assets between residents and nonresidents.
Related Term(s): Balance of payments, Current account (international), Financial account (international)
Capital consumption adjustment (CCAdj), (private)
Capital consumption adjustment (CCAdj), (private)
Bureau of Economic Analysis (BEA)
Definition: Consists of tax-return-based depreciation charges for corporations and nonfarm proprietorships and of historical-cost depreciation (calculated by BEA) for farm proprietorships, rental income of persons, and nonprofit institutions.
Related Term(s): Consumption of fixed capital (CFC)
Bureau of Economic Analysis (BEA)
Definition: Expenditures made to acquire, add to, or improve property, plant, and equipment (PP&E). PP&E includes: land, timber, and minerals; structures, machinery, equipment, special tools, and other depreciable property; construction in progress; and tangible and intangible exploration and development costs. Changes in PP&E due to changes in entity—such as mergers, acquisitions, and divestitures—or to changes in accounting methods are excluded. Capital expenditures are measured on a gross basis; sales and other dispositions of fixed assets are not netted against them.
Definition: A measure of the flow of services available for production from the stock of capital goods. Growth in the capital input differs from growth in the capital stock because different types of capital goods (such as equipment, structures, inventories, or land) contribute differently to production.
Economics: Principles & Practices
Definition: Market in which financial capital is loaned and/or borrowed for more than one year
Federal Reserve Bank of Cleveland
Definition: The market in which corporate equity and longer-term debt securities (those maturing in more than one year) are issued and traded.
Related Term(s): Long-term interest rates
Definition: A system of accounting in which revenues are recorded when actually received and outlays are recorded when payment is made. Compare with accrual accounting.
Related Term(s): Accrual accounting
Federal Reserve Bank of San Francisco
Definition: A system, used especially in computing income tax, in which income is not credited until it is actually or constructively received and expenses are not charged until they have been paid; to be distinguished from the accrual method, in which income is credited when the legal right to the income occurs and expenses are charged when the legal liability becomes enforceable.
Economics: Principles & Practices
Definition: Ruling requiring a company to stop an unfair business practice that reduces or limits competition
Federal Reserve Bank of Cleveland
Definition: An order issued after notice and opportunity for hearing, requiring a depository institution, a holding company, or a depository institution official to terminate unlawful, unsafe, or unsound banking practices. Cease-and-desist orders are issued by the appropriate federal regulatory agencies under the Financial Institutions Supervisory Act and can be enforced directly by the courts.
Federal Reserve Bank of Minneapolis
Definition: An order issued after notice and opportunity for hearing, requiring a depository institution, a holding company, or a depository institution official to terminate unlawful, unsafe, or unsound banking practices. Cease-and-desist orders are issued by the appropriate federal regulatory agencies under the Financial Institutions Supervisory Act and can be enforced directly by the courts.
Federal Reserve Bank of San Francisco
Definition: An order issued after notice and opportunity for hearing, requiring a depository institution, a holding company, or a depository institution official to terminate unlawful, unsafe, or unsound banking practices. Cease-and-desist orders are issued by the appropriate federal regulatory agencies under the Financial Institutions Supervisory Act and can be enforced directly by the courts.
Economics: Principles & Practices
Definition: Bank that can lend to other banks in times of need, a ”bankers’ bank
Definition: A government-established agency responsible for conducting monetary policy and overseeing credit conditions. The Federal Reserve System fulfills those functions in the United States. See also Federal Reserve System and monetary policy.
Federal Reserve Bank of Cleveland
Definition: The principal monetary authority of a nation, a central bank performs several key functions, including issuing currency and regulating the supply of credit in the economy. The Federal Reserve is the central bank of the United States.
Federal Reserve Bank of Cleveland
Definition: In order to influence market conditions or exchange rate movements, central banks buy or sell their currency or the currency of other countries.
Economics: Principles & Practices
Definition: Receipt or document showing that an investor has made an interest-bearing loan to a financial institution
Federal Reserve Bank of Minneapolis
Definition: The buying or selling of currency, foreign or domestic, by central banks in order to influence market conditions or exchange rate movements.
Federal Reserve Bank of San Francisco
Definition: A form of time deposit at a bank or savings institution which cannot be withdrawn before a specified maturity date without being subject to an interest penalty for early withdrawal. Small-denomination CDs are often purchased by individuals. Large CDs of $100,000 or more are often in negotiable form, meaning they can be sold or transferred among holders before maturity.
Federal Reserve Bank of Cleveland
Definition: A form of time deposit at a bank or savings institution; a time deposit cannot be withdrawn before a specified maturity date without being subject to an interest penalty for early withdrawal. Small-denomination CDs are often purchased by individuals. Large CDs of $100,000 or more are often in negotiable form, meaning they can be sold or transferred among holders before maturity.
Federal Reserve Bank of Minneapolis
Definition: A form of time deposit at a bank or savings institution; a time deposit cannot be withdrawn before a specified maturity date without being subject to an interest penalty for early withdrawal. Small-denomination CDs are often purchased by individuals. Large CDs of $100,000 or more are often in negotiable form, meaning they can be sold or transferred among holders before maturity.
Bureau of Economic Analysis (BEA)
Definition: A measure used to approximate the chain-type index level and is calculated by taking the current-dollar level of a series in the base period and multiplying it by the change in the chain-type quantity index number for the series since the base period. Chained-dollar estimates correctly show growth rates for a series, but are not additive in periods other than the base period.
Related Term(s): Chained-type index, Current-dollar estimate
Bureau of Economic Analysis (BEA)
Definition: Index that is based on the linking (chaining) of indexes to create a time series. Annual chain-type Fisher indices are used in BEA’s national income and product accounts (NIPAs) whereby Fisher ideal price indices are calculated using the weights of adjacent years. Those annual changes are then multiplied (chained) together, forming the chain-type index time series.
Related Term(s): Chained-dollar estimate, Current-dollar estimate
Bureau of Economic Analysis (BEA)
Definition: The change in the physical volume of inventories owned by private business, valued at the average prices of the period. It differs from the change in the book value of inventories reported by many businesses; the difference is the inventory valuation adjustment (IVA).
Federal Reserve Bank of Cleveland
Definition: The movement of checks from the banks or other depository institutions where they are deposited back to those on which they are written, and funds movement in the opposite direction. This process results in credits to accounts at the institutions of deposit and corresponding debits to the accounts at the paying institutions. The Federal Reserve participates in check clearing through its nationwide facilities, though many checks are cleared by private sector arrangement.
Federal Reserve Bank of Minneapolis
Definition: The movement of a check from the depository institution at which it was deposited back to the institution on which it was written; the movement of funds in the opposite direction and the corresponding credit and debit to the involved accounts. The Federal Reserve operates a nationwide check-clearing system.
Federal Reserve Bank of San Francisco
Definition: The movement of checks from the banks or other depository institutions where they are deposited back to those on which they are written, and funds movement in the opposite direction. This process results in credits to accounts at the institutions of deposit and corresponding debits to accounts at the paying institutions. The Federal Reserve participates in check clearing through its nationwide facilities, though many checks are cleared by private sector arrangement.
Definition: Data on award of child support payments were collected from people 15 years or older with children under 21 years of age whose other parent was not living in the household. Information on recipiency and amount of payments was obtained from people who reported that they were awarded or had agreements to receive child support payments. Reason for nonaward of child support. Final agreement pending: A child support agreement was awaiting final court, magisterial, or legal action before becoming final, and/or a voluntary written agreement was not yet final. Joint custody granted: Housing, care, and support of the child(ren) was shared by both parents; therefore, no money or other support was exchanged. Did not want child support: The custodial parent indicated he/she did not want child support for own child(ren). Unable to locate other parent: Child support was desired, but the child(ren)’s noncustodial parent could not be located. Unable to establish paternity: Child support arrangements could not be made because the child(ren)’s paternity could not be established. Some other reason: The custodial parent wanted child support, and the reason for nonaward did not fit any of the reasons listed above. Inclusion of health insurance in child support award. This item refers to whether the child(ren)’s noncustodial parent had made health insurance arrangements for his/her child(ren) as part of the child support award. Arrangements for health insurance could have been made by the noncustodial parent purchasing a separate policy for the child(ren) or including the child(ren) under the health insurance provided by his/her employer. In either event, the purchase of, or inclusion of, health insurance must be part of the child support agreement. Insurance taken out by the custodial parent but paid for from child support payment by the noncustodial parent is not included. Type of child support arrangement. Voluntary written agreement: Voluntary written agreements between the parties. This agreement may or may not have been recognized by the courts as part of the divorce or separation proceedings. This type of agreement was not ordered by the courts. Court ordered: Payments ordered by the court. Court-ordered payments usually take place when a mutually acceptable agreement cannot be worked out between the parties. Other: Arrangements not within either of the two cases above. This category includes informal verbal agreements.
Definition: The term ”children,” as used in tables on living arrangements of children under 18, are all persons under 18 years, excluding people who maintain households, families, or subfamilies as a reference person or spouse. Own children in a family are sons and daughters, including stepchildren and adopted children, of the householder. Similarly, ”own” children in a subfamily are sons and daughters of the married couple or parent in the subfamily. (All children shown as members of related subfamilies are own children of the person(s) maintaining the subfamily.) For each type of family unit identified in the CPS, the count of ”own children under 18 years old” is limited to never-married children; however, ”own children under 25” and ”own children of any age,” as the terms are used here, include all children regardless of marital status. The counts include never-married children living away from home in college dormitories. Related children in a family include own children and all other children under 18 years old in the household who are related to the householder by birth, marriage, or adoption. The count of related children in families was formerly restricted to never-married children. However, beginning with data for 1968 the Bureau of the Census includes ever-married children under the category of related children. This change added approximately 20,000 children to the category of related children in March 1968.
Definition: The question ”How many babies has…ever had, if any? (Do not count stillbirths)” is asked of all women 15 to 44 years old. When asking about children ever born, interviewers are instructed to include children born to the women before her present marriage, children no longer living, and children away from home as well as children who are still living in the home. It is possible that some never-married mothers living with one or more of their natural children reported themselves as having been married. In addition, many mothers who first married after the birth of one or more children counted those children, as they were expected to do. Nevertheless, data are probably less complete for births out of wedlock than for births within marriage.
Internal Revenue Service (IRS)
Definition: Assuming all other dependency tests are met, the citizen or resident test allows taxpayers to claim a dependency exemption for persons who are U.S. citizens for some part of the year or who live in the United States, Canada, or Mexico for some part of the year.
Definition: There are five categories of citizenship status: 1) Born in the United States; 2) Born in Puerto Rico or another outlying area of the U.S.; 3) Born abroad of U.S. citizen parents; 4) Naturalized citizens; 5) Non-citizens. Place of birth was asked for every household member in the CPS sample, and for the parents of every household member. People born in the U.S. or it’s outlying areas, or whose parents were born in the U.S. or it’s outlying areas, were not asked citizenship questions. Citizenship status (1), (2), or (3) was assigned during the editing phase of data preparation based on the place of birth of the household member, or the place of birth of his or her parents. People born outside the U.S. and it’s outlying areas, and whose parents were born outside the U.S. and it’s outlying areas, were asked, ”Are you a citizen of the United States.” ‘Yes’ answers were assigned to the naturalized citizen category (4) and ‘No’ answers were assigned to the ”Not a citizen” category (5) during the editing process. People for whom no birthplace was provided were assigned a citizenship status during the editing process. For example, the citizenship status of a child might have been assigned based on the citizenship status of it’s mother.
Bureau of Labor Statistics (BLS)
Definition: A detailed grouping of weight groups. Classification groups are used to map weight groups to higher levels of aggregation called strata. Classification groups are represented by (1) six, eight, or ten digit Harmonized numbers, (2) composites of six, eight, or ten digit Harmonized numbers, (3) hybrid groupings specifically requested by industry analysts, or (4) services groupings developed by service analysts.
Federal Reserve Bank of Cleveland
Definition: An institution where mutual claims are settled between accounts of member depository institutions. Clearinghouses among banks have traditionally been organized for check-clearing purposes, but more recently have cleared other types of settlements, including electronic fund transfers.
Federal Reserve Bank of Minneapolis
Definition: An institution where mutual claims are settled between accounts of member depository institutions. Clearinghouses among banks have traditionally been organized for check-clearing purposes, but more recently have cleared other types of settlements, including electronic fund transfers.
Federal Reserve Bank of San Francisco
Definition: An institution where mutual claims are settled between accounts of member depository institutions. Clearinghouses among banks have traditionally been organized for check-clearing purposes, but more recently have cleared other types of settlements, including electronic fund transfers.
Federal Reserve Bank of San Francisco
Definition: An automated clearing system used primarily for international payments. This system is owned and operated by the New York Clearinghouse banks and engages Fedwire for settlement.
Federal Reserve Bank of Cleveland
Definition: Generally, any loan or credit sale agreement in which the amounts advanced, plus any finance charges, are expected to be repaid in full over a definite time. Most real estate and automobile loans are closed-end agreements.
Bureau of Labor Statistics (BLS)
Definition: A cohort in the Bureau of Labor Statistics’ National Longitudinal Surveys (NLS) program is a group of people, defined by age, that make up a particular study. For example, the National Longitudinal Survey of Youth 1979 (NLSY79) cohort is made up of people born between January 1, 1957, and December 31, 1964.
Economics: Principles & Practices
Definition: Property or other security used to guarantee repayment of a loan
Federal Reserve Bank of Cleveland
Definition: Property that is offered to secure a loan or other credit and that becomes subject to seizure on default. (Also called security.)
Bureau of Labor Statistics (BLS)
Definition: Method whereby representatives of employees (unions) and employers determine the conditions of employment through direct negotiation, normally resulting in a written contract setting forth the wages, hours, and other conditions to be observed for a stipulated period (e.g., 3 years). Term also applies to union-management dealings during the term of the agreement.
Definition: The college enrollment statistics are based on replies to the interviewer’s inquiry as to whether the person was attending or enrolled in school and the grade or school or year of college. Interviewers were instructed to count as enrolled anyone who had been enrolled at any time during the current term or school year, except those who have left for the remainder of the term. Thus, regular college enrollment includes those people attending a 4-year or 2-year college, university, or professional school (such as medical or law school) in courses that may advance the student toward a recognized college or university degree (e.g., BA or MA). Attendance may be either full time or part time, during the day or night. The college student need not be working toward a degree, but he/she must be enrolled in a class for which credit would be applied toward a degree. (see ”school enrollment”). Students are classified by year of college, based on the academic year (not calendar year) they are attending. Undergraduate years are the 1st through 4th year, or freshman through senior. Graduate or professional school years include the 5th year and higher. Two-year and four-year colleges: College students were asked to report whether the college in which they were enrolled was a 2-year college (junior or community college) or a 4-year college or university. Students enrolled in the first 4 years (undergraduates) were classified by the type of college they reported. Graduate students are shown as a separate group. Attendance, full-time and part-time. College students were classified according to whether they were attending school on a full-time or part-time basis. A student was regarded as attending college full time if he/she was taking 12 or more hours of classes during the average school week, and part time if he/she was taking less than 12 hours of classes during the average school week.
Economics: Principles & Practices
Definition: Depository institution that, until the mid-1970s, had the exclusive right to offer checking accounts
Federal Reserve Bank of Minneapolis
Definition: Bank that offers a broad range of deposit accounts, including checking, savings and time deposits and extends loans to individuals and businesses. Commercial banks can be contrasted with investment banking firms, such as brokerage firms, which generally are involved in arranging for the sale of corporate or municipal securities.
Federal Reserve Bank of San Francisco
Definition: Bank that offers a broad range of deposit accounts, including checking, savings, and time deposits, and extends loans to individuals and businesses. Commercial banks can be contrasted with investment banking firms, such as brokerage firms, which generally are involved in arranging for the sale of corporate or municipal securities.
Related Term(s): Financial institution
Bureau of Economic Analysis (BEA)
Definition: Method used to estimate purchases of a commodity by intermediate or final users. The method generally begins with an estimate of the total supply of a commodity available for domestic uses; it then either attributes a fixed percentage of supply to an intermediate or final use, or it adjusts for intermediate purchases and attributes the residual to final uses.
Federal Reserve Bank of San Francisco
Definition: Enacted by Congress in 1977, the CRA encourages banks to help meet the credit needs of their communities for housing and other purposes, particularly in neighborhoods with low or moderate incomes, while maintaining safe and sound operations.
Federal Reserve Bank of San Francisco
Definition: description available for public inspection at each bank office indicating, on a map, the communities served by that office and the types of credit the bank is prepared to extend within the communities served.
Bureau of Labor Statistics (BLS)
Definition: When one nation’s opportunity cost of producing an item is less than another nation’s opportunity cost of producing that item. A good or service with which a nation has the largest absolute advantage (or smallest absolute disadvantage) is the item for which they have a comparative advantage.
Economics: Principles & Practices
Definition: Country’s ability to produce a given product relatively more efficiently than another country; production at a lower opportunity cost
Federal Reserve Bank of Cleveland
Definition: Describes the ability of a person, company or country to produce a good or service at a lower cost relative to other goods and services. Even though a country may have an absolute advantage over another country, it still will be better off specializing in the good or service in which it has a comparative advantage and trading for goods and services it doesn’t produce as efficiently.
Federal Reserve Bank of Minneapolis
Definition: Describes the ability of a person, company or country to produce a good or service at a lower cost relative to other goods and services. Even though a country may have an absolute advantage over another country, it still will be better off specializing in the good or service in which it has a comparative advantage and trading for goods and services it doesn’t produce as efficiently.
Bureau of Labor Statistics (BLS)
Definition: A term used to encompass the entire range of wages and benefits, both current and deferred, that workers receive out of their employment. In the Employment Cost Index compensation includes the employer’s cost of wages and salaries, plus the cost of providing employee benefits.
Related Term(s): Total compensation (Employment Cost Index)
Bureau of Economic Analysis (BEA)
Definition: Income accruing to employees as remuneration for their work for domestic production. It is the sum of wage and salary accruals and of supplements to wages and salaries. It includes compensation paid to the rest of the world and excludes compensation received from the rest of the world.
Federal Reserve Bank of Minneapolis
Definition: One of two categories of bidders on Treasury securities: competitive and noncompetitive. Competitive bidders are usually financial institutions.
Federal Reserve Bank of Cleveland
Definition: Competitive bidders purchase Treasury securities if their tenders are accepted, while noncompetitive bidders purchase securities at the price resulting from an auction. Competitive bidders are usually financial institutions.
Bureau of Labor Statistics (BLS)
Definition: The distinction between complete and incomplete income reporters is based in general on whether the respondent provided values for major sources of income, such as wages and salaries, self-employment income, and Social Security income. Even complete income reporters may not have provided a full accounting of all income from all sources. In the current survey, across-the-board zero income reporting was designated as invalid, and the consumer unit was categorized as an incomplete reporter. In all tables, income data are for complete income reporters only.
Federal Reserve Bank of Cleveland
Definition: The Comptroller of the Currency is an officer of the Treasury Department responsible for chartering national banks and has primary supervisory authority over them. All national banks are required to be members of the Federal Reserve System and are insured by the Federal Deposit Insurance Corporation.
Federal Reserve Bank of Minneapolis
Definition: The Comptroller of the Currency is an officer of the Treasury Department responsible for chartering national banks and has primary supervisory authority over them. All national banks are required to be members of the Federal Reserve System and are insured by the Federal Deposit Insurance Corporation.
Federal Reserve Bank of Cleveland
Definition: The Congressional Budget Office (CBO) was created by the Congressional Budget and Impoundment Control Act of 1974. The CBO’s mission is to provide the Congress with the objective, timely, nonpartisan analyses needed for economic and budget decisions and with the information and estimates required for the Congressional budget process. CBO prepares independent analyses and estimates relating to the budget and the economy and presents options and alternatives for the Congress to consider.
Federal Reserve Bank of San Francisco
Definition: A statutory body established by Congress in 1976. The Council, with 30 members who represent a broad range of consumer and creditor interests, advises the Federal Reserve Board on the exercise of its responsibilities under the Consumer Credit Protection Act and on other matters on which the Federal Reserve Board seeks its advice.
Federal Reserve Bank of Minneapolis
Definition: A statutory body established by Congress in 1976. The Council, with 30 members who represent a broad range of consumer and creditor interests, advises the Federal Reserve Board on the exercise of its responsibilities under the Consumer Credit Protection Act and on other matters on which the Federal Reserve Board seeks its advice.
Definition: An index of consumer optimism based on surveys of consumers’ attitudes about current and future economic conditions. One such index–the index of consumer sentiment–is constructed by the University of Michigan Survey Research Center. A similar index–the Consumer Confidence Index–is constructed by The Conference Board.
Federal Reserve Bank of San Francisco
Definition: A measurement of the cost of living determined by the Bureau of Labor Statistics
Definition: An index of the cost of living commonly used to measure inflation. The Bureau of Labor Statistics publishes the CPI-U, an index of consumer prices based on the typical market basket of goods and services consumed by all urban consumers during a base period, and the CPI-W, an index of consumer prices based on the typical market basket of goods and services consumed by urban wage earners and clerical workers during a base period. (BLS) See also inflation.
Federal Reserve Bank of Minneapolis
Definition: A measurement of the cost of living determined by the Bureau of Labor Statistics.
Related Term(s): Inflation
Related Term(s): Consumer confidence
Bureau of Labor Statistics (BLS)
Definition: A consumer unit comprises either: (1) all members of a particular household who are related by blood, marriage, adoption, or other legal arrangements; (2) a person living alone or sharing a household with others or living as a roomer in a private home or lodging house or in permanent living quarters in a hotel or motel, but who is financially independent; or (3) two or more persons living together who pool their income to make joint expenditure decisions. Financial independence is determined by the three major expense categories: Housing, food, and other living expenses. To be considered financially independent, at least two of the three major expense categories have to be provided by the respondent.
Definition:In principle, the value of goods and services purchased and used up during a given period by households and governments. In practice, the Bureau of Economic Analysis counts purchases of many long-lasting goods (such as cars and clothes) as consumption even though the goods are not used up. Consumption by households alone is also called consumer spending. See also national income and product accounts.
Related Term(s): National income and product accounts (NIPAs)
Bureau of Economic Analysis (BEA)
Definition: The charge for the using up of private and government fixed capital located in the United States. It is the decline in the value of the stock of fixed assets due to wear and tear, obsolescence, accidental damage, and aging. For general government and for nonprofit institutions that primarily serve individuals, CFC serves as a measure of the value of the current services of the fixed assets owned and used by these entities.
Federal Reserve Bank of San Francisco
Definition: An accounting method that allows member banks of the Federal Reserve a one-day lag when calculating their required reserves and reserves held as vault cash. Except for the one-day lag, assets and liabilities used in calculating reserves and required reserves are those of the same week.
Definition: Authority in law to enter into contracts or incur other obligations in advance of, or in excess of, funds available for that purpose. Although it is a form of budget authority, contract authority does not provide the funds to make payments. Those funds must be provided later, usually in a subsequent appropriation act (called a liquidating appropriation). Contract authority differs from a federal agency’s inherent authority to enter into contracts, which may be exercised only within the limits of available appropriations. See also appropriation act, budget authority, and obligation.
Related Term(s): Appropriation act, Budget authority, Obligation
Bureau of Labor Statistics (BLS)
Definition: PPI data are commonly used in escalating purchase and sales contracts. These contracts typically specify dollar amounts to be paid at some point in the future. It is often desirable to include an escalation clause that accounts for changes in input prices. For example, a long-term contract for bread may be escalated for changes in wheat prices by applying the percent change in the PPI for wheat to the contracted price for bread.
Bureau of Economic Analysis (BEA)
Definition: This measure–profits from current production–is the income that arises from current production, measured before income taxes, of organizations treated as corporations in the national income and product accounts (NIPAS). With several differences, this income is measured as receipts less expenses as defined in Federal tax law. Among these differences are: Receipts exclude capital gains and dividends received; expenses exclude bad debt, depletion, and capital losses; inventory withdrawals are valued at current cost; and depreciation is on a consistent accounting basis and valued at current replacement cost.
Related Term(s): Inventory valuation adjustment (IVA)
Federal Reserve Bank of Cleveland
Definition: A bank that accepts deposits of and performs banking services for other depository institutions.
Federal Reserve Bank of Cleveland
Definition: Another person who signs for a loan and assumes equal liability for it.
Bureau of Labor Statistics (BLS)
Definition: A Cost of Living Index measures differences in the price of goods and services, and allows for substitutions to other items as prices change. A Consumer Price Index measures a price change for a constant market basket of goods and services from one period to the next within the same city (or in the Nation). The CPI is not a true cost of living index and should not be used for place to place comparisons.
Definition: Birth place codes available in the CPS include; one code for the United States (fifty states and Washington DC); one code for Puerto Rico; one code for all other outlying areas of the United States (American Samoa, Guam, U.S. Virgin Islands, Northern Marinas, etc.); separate codes for 100 individual foreign countries or areas; residual codes for other cases (At Sea, etc.). People for whom no birthplace was provided were assigned a birthplace during the editing process based on several criteria. For example, the birthplace of a child might have been assigned based on the birthplace of it’s mother and/or father.
Definition: People born outside the United States (see Country of Birth) were asked the year they came to the United States to live. Persons in citizenship categories (2) to (5) (see Citizenship Status) for whom no year of entry was reported were assigned a value for ”Year of Entry” during the editing process based on other reported information.
Related Term(s): Consumer price index (CPI)
Federal Reserve Bank of Cleveland
Definition: A term coined by Joseph Schumpeter, an Austrian economist, in the 1950 book, Capitalism, Socialism, and Democracy, to describe the process that a capitalist economy constantly undergoes as it reshapes itself and bounces from one growth path to another. He wrote that capitalism was a system ”that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating the new one.”
Federal Reserve Bank of Cleveland
Definition: The promise to pay in the future in order to buy or borrow in the present. The right to defer payment of debt.
Definition: A sudden reduction in the availability of loans and other types of credit from banks and capital markets at given interest rates. The reduced availability of credit can result from many factors, including an increased perception of risk on the part of lenders, an imposition of credit controls, or a sharp restriction of the money supply. See also money supply.
Related Term(s): Money supply
Definition: A system of budgeting for federal credit activities that focuses on the cost of subsidies conveyed in federal credit assistance. The system was established by the Federal Credit Reform Act of 1990. See also credit subsidy.
Related Term(s): Credit subsidy
Federal Reserve Bank of Cleveland
Definition: A statistical system used to determine whether or not to grant credit by assigning numerical scores to various characteristics related to creditworthiness.
Definition: The estimated long-term cost to the federal government of a direct loan or loan guarantee. That cost is calculated on the basis of net present value, excluding federal administrative costs and any incidental effects on revenues or outlays. For direct loans, the subsidy cost is the net present value of loan disbursements minus repayments of interest and principal, adjusted for estimated defaults, prepayments, fees, penalties, and other recoveries. For loan guarantees, the subsidy cost is the net present value of estimated payments by the government to cover defaults and delinquencies, interest subsidies, or other payments, offset by any payments to the government, including origination and other fees, penalties, and recoveries. See also outlays, present value, and revenues.
Related Term(s): Outlays, Present value, Revenues
Economics: Principles & Practices
Definition: Nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services
Federal Reserve Bank of San Francisco
Definition: Financial cooperative organization of individuals who have a common bond, such as a place of employment, residence, or membership in a labor union. Credit unions accept deposits from members, pay interest (in the form of dividends) on the deposits out of earnings, and use their funds mainly to provide consumer installment loans to members.
Federal Reserve Bank of Minneapolis
Definition: Financial cooperative organization of individuals who have a common bond, such as place of employment or residence or membership in a labor union. Credit unions accept deposits from members, pay interest (in the form of dividends) on the deposits out of earnings and use their funs to provide consumer installment loans to members.
Federal Reserve Bank of Cleveland
Definition: A creditor’s measure of a consumer’s past and future ability and willingness to repay debts.
Bureau of Economic Analysis (BEA)
Definition: Transactions in services between the residents of one country and the residents of another country. From the U.S. viewpoint, it consists of exports and imports of services between U.S. residents and foreign residents. It includes both trade within multinational companies (intrafirm trade in services) and trade between unaffiliated parties. It is one of two channels of delivery of services in international markets; the other is sales of services through foreign affiliates of multinational companies.
Federal Reserve Bank of Cleveland
Definition: An increase in the value of one currency relative to another currency. Appreciation occurs when, because of a change in exchange rates, a unit of one currency buys more units of another currency.
Federal Reserve Bank of Minneapolis
Definition: A decline in the value of one currency relative to another currency. Depreciation occurs when, because of a change in exchange rates, a unit of one currency buys fewer units of another currency.
Federal Reserve Bank of Cleveland
Definition: A deliberate upward adjustment in the official exchange rate established, or pegged, by a government against a specified standard, such as another currency or gold.
Definition: A measure of spending or revenues in a given year that has not been adjusted for differences in prices (such as inflation) between that year and a base year. See also nominal dollars.
Related Term(s): Nominal
Bureau of Economic Analysis (BEA)
Definition: Government net transfer receipts from businesses and from persons. These receipts largely consist of deposit insurance premiums, net insurance settlements, donations, fines, fees, certain penalty taxes, and excise taxes paid by nonprofit institutions serving households.
Definition: The net revenues that arise from a country’s international sales and purchases of goods and services plus net international transfers (public or private gifts or donations) and net factor income (primarily capital income from foreign property owned by residents of that country minus capital income from domestic property owned by nonresidents). The current-account balance differs from net exports in that it includes international transfers and net factor income. (BEA) See also net exports.
Related Term(s): Net exports
Bureau of Economic Analysis (BEA)
Definition: The market value of an item. It reflects prices and quantities of the period being measured.
Related Term(s): Chained-dollar estimate
Definition: The part of the federal budget surplus or deficit that results from cyclical factors rather than from underlying fiscal policy. This cyclical component reflects the way in which the surplus or deficit automatically increases or decreases during economic booms or recessions. (CBO) See also deficit, fiscal policy, and surplus; compare with standardized-budget surplus or deficit.
Related Term(s): Deficit, Fiscal policy, Standardized-budget surplus or deficit, Surplus
Data limitations
Federal Reserve Bank of San Francisco
Definition: In stabilization policy, refers to two scenarios: 1) quantitative factual information or data that is only available after the event (e.g., unemployment figures for last month); 2) the raw information that is adjusted for seasonal variations or changes in prices; therefore, data may not accurately measure the activity.
Day trade
Federal Reserve Bank of Cleveland
Definition: Also known as a ”daylight trade.” The purchase and sale or the short sale and cover of the same security in a margin account on the same day.
Daylight trade
Related Term(s): Day trade
Deadweight loss
Federal Reserve Bank of Cleveland
Definition: The value of the real resource cost resulting from some type of market inefficiency. Such inefficiencies can be government induced. For example, taxes (including seigniorage) result in some wasted resources. See also seigniorage.
Related Term(s): Seigniorage
Debit card
Federal Reserve Bank of Cleveland
Definition: A card that resembles a credit card but which debits a transaction account (checking account) with the transfers occurring contemporaneously with the customer’s purchases. A debit card may be machine readable, allowing for the activation of an automated teller machine or other automated payments equipment.
Federal Reserve Bank of Minneapolis
Definition: A card that resembles a credit card but which debits a transaction account (checking account) with the transfers occurring contemporaneously with the customer’s purchases. A debit card may be machine readable, allowing for the activation of an automated teller machine or other automated payments equipment.
Federal Reserve Bank of San Francisco
Definition: A card that resembles a credit card but which debits a transaction account (checking account) with the transfers occurring contemporaneously with the customer’s purchases. A debit card may be machine readable, allowing for the activation of an automated teller machine or other automated payments equipment.
Debt
Definition: The total value of outstanding securities issued by the federal government is referred to as federal debt or gross debt. It has two components: debt held by the public (federal debt held by nonfederal investors, including the Federal Reserve System) and debt held by government accounts (federal debt held by federal government trust funds, deposit insurance funds, and other federal accounts). Debt subject to limit is federal debt that is subject to a statutory limit on its issuance. The current limit applies to almost all gross debt, except a small portion of the debt issued by the Department of the Treasury and the small amount of debt issued by other federal agencies (primarily the Tennessee Valley Authority and the Postal Service). Unavailable debt is debt that is not available for redemption, or the amount of debt that would remain outstanding even if surpluses were large enough to redeem it. Such debt includes securities that have not yet matured (and will be unavailable for repurchase) and nonmarketable securities, such as savings bonds.
Debt held by government accounts
Office of Management and Budget
Definition: Debt Held by Government Accounts—The debt Treasury owes to other accounts within the federal government. Most of it results from the surpluses of the Social Security and other trust funds, which are required by law to be invested in federal securities.
Related Term(s): Debt held by government accounts, Debt limit
Debt held by the public
Citizen’s Guide to the Federal Budget
Definition: Debt held by the public is the total of all Federal deficits, minus surplus, over the years. This is the cumulative amount of money the Federal Government has borrowed from the public, through the sale of notes and bonds of varying sizes and time periods until maturity.
Related Term(s): Federal debt
Debt limit
Office of Management and Budget
Definition: Debt Limit—The maximum amount of federal debt that may legally be outstanding at any time. It includes both the debt held by the public and the debt held by government accounts. When the debt limit is reached, the government cannot borrow more money until the Congress has enacted a law to increase the limit.
Related Term(s): Debt held by government accounts, Debt limit
Debt service
Citizen’s Guide to the Federal Budget
Definition: Debt subject to legal limit, which is roughly the same as gross Federal debt, is the maximum amount of Federal securities that may be legally outstanding at any time. When the limit is reached, the President and Congress must enact a law to increase it.
Related Term(s): Federal debt
Citizen’s Guide to the Federal Budget
Definition: Debt the Government owes itself is the total of all trust fund surpluses over the years, like the Social Security surplus, that the law says must be invested in Federal securities.
Related Term(s): Federal debt
SSI Annual Statistical Report, 2002
Definition: Counting part of the income and resources of certain persons who live with an SSI recipient when determining the amount of the payment. These persons include the ineligible spouses of adult recipients, the ineligible parents of child recipients under age 18, and the immigration sponsor for certain noncitizens.
Internal Revenue Service (IRS)
Definition: The result of the government taking in less money than it spends.
Office of Management and Budget
Definition: A deficit is the amount by which outlays exceed receipts in a fiscal year.
Definition: The amount by which the federal government’s total outlays exceed its total revenues in a given period, typically a fiscal year. See also outlays and revenues; compare with surplus.
Bureau of Labor Statistics (BLS)
Definition: A retirement plan that uses a specific predetermined formula to calculate the amount of an employee’s future benefit. In the private sector, defined benefit plans are typically funded exclusively by employer contributions. In the public sector, defined benefit plans often require employee contributions.
Bureau of Economic Analysis (BEA)
Definition: A defined contribution plan is a type of retirement plan in which the amount of the employer’s annual contribution is specified. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts (through employer contributions and, if applicable, employee contributions), plus any investment earnings on the money in the account.
Bureau of Labor Statistics (BLS)
Definition: A value that allows data to be measured over time in terms of some base period, or, in more obscure terms, an implicit or explicit price index used to distinguish between those changes in the money value of gross national product which result from a change in prices and those which result from a change in physical output. The import and export price indexes produced by the International Price Program are used as deflators in the U.S. national accounts. For example, the Gross Domestic Product (GDP) consists of Consumption Expenditures+ Net Investment + Government Expenditures + Exports – Imports. Various price indexes are used to ”deflate” each component of the GDP in order to make the GDP figures comparable over time. Import price indexes are used to deflate the Import component (i.e. Import Volume is divided by the Import Price index) and the Export price indexes are used to deflate the Export component (i.e. Export Volume is divided by the Export Price index).
Federal Reserve Bank of Cleveland
Definition: A deposit payable on demand, or a time deposit with a maturity period or required notice period of less than 14 days, on which the depository institution does not reserve the right to require at least 14 days written notice of intended withdrawal. Commonly takes the form of a checking account.
Federal Reserve Bank of San Francisco
Definition: Maximum interest rates that can be paid on savings and time deposits at federally insured commercial banks, mutual savings banks, savings and loan associations, and credit unions. Ceilings on credit union deposits are established by the Depository Institutions Deregulation Committee (DIDC). By law, deposit interest rate ceilings were phased out over a six-year period, ending in 1986 under the oversight of the DIDC.
Federal Reserve Bank of Minneapolis
Definition: A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks and credit unions. Although historically they have specialized in certain types of credit, nonbank depository institutions have broadened their powers in recent years. For example, NOW accounts, credit union share drafts and other services similar to checking accounts may be offered by thrift institutions.
Federal Reserve Bank of San Francisco
Definition: A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks, and credit unions. Although historically they have specialized in certain types of credit, the powers of nonbank depository institutions have been broadened in recent years. For example, NOW accounts, credit union share drafts, and other services similar to checking accounts may be offered by thrift institutions.
Federal Reserve Bank of San Francisco
Definition: The Committee responsible for the orderly phase-out over a six-year period of interest rate ceilings on time and savings accounts at depository institutions. Voting members of the DIDC are the Secretary of the Treasury and the chairmen of the Federal Reserve Board, Federal Deposit Insurance Corporation, Federal Home Loan Bank Board, and National Credit Union Administration Board. The Comptroller of the Currency serves as a non-voting member.
Definition: Decline in the value of a currency, financial asset, or capital good. When applied to a capital good, depreciation usually refers to loss of value because of obsolescence, wear, or destruction (as by fire or flood). Book depreciation (also known as tax depreciation) is the depreciation that the tax code allows businesses to deduct when they calculate their taxable profits. It is typically faster than economic depreciation, which represents the actual decline in the value of the asset. Both measures of depreciation appear as part of the national income and product accounts. See also book profits and national income and product accounts.
Federal Reserve Bank of San Francisco
Definition: The trading desk at the Federal Reserve Bank of New York through which open market purchases and sales of government and federal agency securities are made. The desk maintains direct telephone communication with major government securities dealers. A ‘foreign desk’ at the Federal Reserve Bank of New York conducts transactions in the foreign exchange market.
Related Term(s): The desk
Federal Reserve Bank of Cleveland
Definition: The trading desk at the New York Federal Reserve Bank, through which open market purchases and sales of government and federal agency securities are made. The desk maintains direct telephone communication with major government securities dealers. A ”foreign desk” at the New York Federal Reserve Bank conducts transactions in the foreign exchange market.
Federal Reserve Bank of Cleveland
Definition: A situation in which there is a unique solution to the general-equilibrium model. See also indeterminate/indeterminacy.
Related Term(s): General-equilibrium model, Indeterminate/ Indeterminacy
Definition: The act of a government to lower the fixed exchange rate of its currency. The government implements a devaluation by announcing that it will no longer maintain the existing rate by buying and selling its currency at that rate. See also exchange rate.
Federal Reserve Bank of Cleveland
Definition: A deliberate downward adjustment in the official exchange rate established, or pegged, by a government against a specified standard, such as another currency or gold.
Related Term(s): Exchange rate
SSI Annual Statistical Report, 2002
Definition: Classification of impairments, by body system, that identifies the medical condition(s) on which disability-related benefits are based. Before 1985, the coding of the primary and secondary diagnoses for Social Security and Supplemental Security Income applicants was in accordance with the International Classification of Diseases: Clinical Modification 4th ed., 9th rev., using 4-digit ICD-9 codes. In 1985, the Social Security Administration (SSA) implemented a revised method to determine and enter impairment codes in administrative records. This revised approach provides for a modified impairment coding system, generally using 3 digits (followed by zero), loosely based on the ICD-9 codes. For research purposes, the ICD-9 codes and SSA impairment codes may not be identical. However, the diagnostic groupings shown in the statistical tables closely parallel the major ICD-9 disease classifications.
Internal Revenue Service (IRS)
Definition: This allows tax refunds to be deposited directly to the taxpayer’s bank account. Direct Deposit is a fast, simple, safe, secure way to get a tax refund. The taxpayer must have an established checking or savings account to qualify for Direct Deposit. A bank or financial institution will supply the required account and routing transit numbers to the taxpayer for Direct Deposit.
Bureau of Economic Analysis (BEA)
Definition: Investment in which a resident of one country obtains a lasting interest in, and a degree of influence over, the management of a business enterprise in another country. In the United States, the criterion used to distinguish direct investment from other types of investment is ownership of at least 10 percent of the voting securities of an incorporated business enterprise or an equivalent ownership interest of an unincorporated business enterprise.
Bureau of Economic Analysis (BEA)
Definition: Funds that parent companies provide to their affiliates net of funds that affiliates provide to their parents. For U.S. direct investment abroad, capital flows also include funds that U.S. direct investors pay to unaffiliated foreign residents when foreign affiliates are acquired and funds that U.S. investors receive from them when foreign affiliates are sold. Similarly, for foreign direct investment in the United States, capital flows include funds that foreign direct investors pay to unaffiliated U.S. residents when U.S. affiliates are acquired and funds that foreign direct investors receive from them when U.S. affiliates are sold. Foreign direct investment in the United States capital flows also include debt and equity transactions between U.S. affiliates and members of their foreign parent groups other than their foreign parents. Direct investment capital flows consist of equity capital flows, intercompany debt, and reinvested earnings. Direct investment capital flows are components of the financial account (international).
Related Term(s): Direct investment, U.S. parent
Bureau of Economic Analysis (BEA)
Definition: A measure of the value of direct investors’ equity in, and net outstanding loans to, their affiliates in which the equity portion of the position is valued based on the current cost of plant and equipment, land, and inventories. This measure values the direct investors’ shares of the affiliates’ investment in plant and equipment, using the current cost of capital equipment; in land, using general price indexes; and in inventories, using estimates of their replacement cost.
Bureau of Economic Analysis (BEA)
Definition: A measure of the value of direct investors’ equity in, and net outstanding loans to, their affiliates in which the direct investors’ investment is valued at book value. It largely reflects prices at the time of the investment rather than prices of the current period and is not ordinarily adjusted to reflect the changes in the current costs or the replacement costs of tangible assets or in stock market valuations of firms.
Bureau of Economic Analysis (BEA)
Definition: A measure of the value of direct investors’ equity in, and net outstanding loans to, their affiliates, in which the equity portion of the position is valued at current stock market prices. This measure revalues direct investors’ equity based on indexes of stock market prices.
Bureau of Economic Analysis (BEA)
Definition: A table in the input-output (I-O) accounts that shows the input of commodities that an industry requires to produce a dollar of output. It also shows the value-added components that an industry requires to produce a dollar of output. The input coefficients are referred to as direct-requirements coefficients.
Related Term(s): Make table, Use table
Definition: Synonymous with mandatory spending. Direct spending is budget authority provided in laws other than appropriation acts. For the purposes of the Deficit Control Act, it is also defined as including entitlement authority and the Food Stamp program. See also appropriation act, budget authority, and entitlement; compare with mandatory and discretionary spending.
Related Term(s): Appropriation act, Budget authority, Discretionary spending, Entitlement, Mandatory spending
Federal Reserve Bank of Cleveland
Definition: A type of floating exchange rate that is not completely freely floating because central banks intervene from time to time to alter the rate from its free-market level. It is still a floating rate because it has not been pegged at a predetermined par value.
Federal Reserve Bank of Minneapolis
Definition: A type of floating exchange rate that is not completely freely floating because central banks intervene from time to time to alter the rate from its free-market level. It is still a floating rate because it has not been pegged at a predetermined par value.
Federal Reserve Bank of San Francisco
Definition: A type of floating exchange rate that is not completely freely floating because central banks intervene from time to time to alter the rate from its free-market level. It is still a floating rate because it has not been pegged at a predetermined par value.
SSI Annual Statistical Report, 2002
Definition: The inability to engage in substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months. (Special rules apply for workers aged 55 or older whose disability is based on blindness. The 12-month requirement does not apply to SSI beneficiaries who are blind.) Individuals are considered to be disabled only if their physical or mental impairment(s) are of such severity that they are not only unable to do their previous work but cannot–because of their age, education, or work experience–engage in any other kind of substantial gainful activity that exists in the national economy, regardless of whether such work exists in the immediate area in which they live, or whether a specific job vacancy exists for them, or whether they would be hired if they applied for work. The SGA criterion does not apply to children under age 18 in the Supplemental Security Income program. The standard for them is a medically determinable physical or mental impairment that results in marked and severe functional limitations.
Federal Reserve Bank of Cleveland
Definition: The difference between the face value and the price paid for a security.
Economics: Principles & Practices
Definition: Interest rate the Federal Reserve System charges on loans to financial institutions
Definition: The interest rate the Federal Reserve System charges on a loan that it makes to a bank. Such loans, when allowed, enable a bank to meet its reserve requirements without reducing its loans.
Federal Reserve Bank of Cleveland
Definition: The interest rate at which eligible depository institutions may borrow funds, usually for short periods, directly from the Federal Reserve Banks. The law requires the board of directors of each Reserve Bank to establish the discount rate every 14 days subject to the approval of the Board of Governors.
Federal Reserve Bank of Minneapolis
Definition: The interest rate at which eligible depository institutions may borrow funds, usually for short periods, directly from a Federal Reserve Bank. The law requires the board of directors of each Reserve Bank to establish the discount rate every 14 days subject to the approval of the Board of Governors.
Federal Reserve Bank of San Francisco
Definition: Interest rate at which an eligible depository institution may borrow funds, typically for a short period, directly from a Federal Reserve Bank. The law requires that the board of directors of each Reserve Bank establish the discount rate every fourteen days subject to the approval of the Board of Governors.
Federal Reserve Bank of Cleveland
Definition: Figurative expression for the Federal Reserve facility which extends credit directly to eligible depository institutions (those with transaction accounts or nonpersonal time deposits).
Definition: Jobless people who are available for work but who are not actively seeking it because they think they have poor prospects of finding a job. Discouraged workers are not counted as part of the labor force or as being unemployed. (BLS) See also labor force and unemployment rate.
Related Term(s): Labor force, Unemployment rate
Bureau of Labor Statistics (BLS)
Definition: Persons not in the labor force who want and are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months), but who are not currently looking because they believe there are no jobs available or there are none for which they would qualify.
Economics: Principles & Practices
Definition: spending for federal programs that must receive annual authorization (p.260)
Office of Management and Budget
Definition: Discretionary spending is what the President and the Congress decide to spend through annual appropriations bills. Examples include money for such activities as the FBI, the Coast Guard, housing and education, space exploration, highway construction, defense, and foreign aid. See also mandatory spending.
Definition: Budget authority provided in appropriation acts, except that provided to fund direct spending programs. See also appropriation act; compare with direct spending.
Citizen’s Guide to the Federal Budget
Definition: Discretionary spending is what the President and Congress must decide to spend for the next fiscal year through 13 annual appropriations bills. Examples include money for such activities as the FBI and the Coast Guard, housing and education, space exploration and highway construction, and defense and foreign aid.
Definition: Ceilings imposed on the amount of budget authority provided in annual appropriation acts and on the outlays that flow from that budget authority. The limits, which are set forth in section 251 of the Deficit Control Act (as amended), currently apply through fiscal year 2002. Separate caps have often been imposed on specific categories of discretionary spending, such as defense, highways, and violent crime reduction. Each discretionary spending limit is enforced through sequestration. See also budget authority, discretionary spending, outlays, and sequestration.
Related Term(s): Budget authority, Discretionary spending, Outlays
Bureau of Economic Analysis (BEA)
Definition: Total after-tax income received by persons; it is the income available to persons for spending or saving.
Economics: Principles & Practices
Definition: Personal income less individual income taxes; total income available to the consumer sector after income taxes
Definition: The income that individuals receive, including transfer payments, minus the personal taxes and fees that they pay to governments. (BEA) See also transfer payments.
Related Term(s): Personal consumption expenditures (PCE), Personal income, Personal saving
Federal Reserve Bank of Cleveland
Definition: An investment strategy in which total investment is divided among assets of different types (stocks, bonds, real estate), which are unlikely to perform uniformly. Such a strategy reduces the investor’s exposure to risk. It’s the opposite of putting all one’s investment eggs into one basket.
Economics: Principles & Practices
Definition: See Dow-Jones Industrial Average
Related Term(s): Dow-Jones Industrial Average
Definition: Total purchases of goods and services, regardless of origin, by U.S. consumers, businesses, and governments during a given period. Domestic demand equals gross domestic product minus net exports. (BEA) See also gross domestic product and net exports; compare with aggregate demand.
Related Term(s): Aggregate demand, Gross domestic product (GDP), Net exports
Bureau of Economic Analysis (BEA)
Definition: Technique for estimating real value added by industry in the gross domestic product (GDP)-by-industry accounts. Under this procedure, an industry’s gross output and its intermediate inputs are deflated separately–hence, the term “double deflation.” Real value added is then estimated as the difference between deflated, or real, gross output and real intermediate inputs.
Bureau of Economic Analysis (BEA)
Definition: Tangible products that can be stored or inventoried and that have an average life of at least three years.
Related Term(s): Nondurable goods, Services, Structures
Federal Reserve Bank of Cleveland
Definition: A situation in which net worth fluctuates depending on interest rates. This occurs when there is a mismatch in the duration between the loans held on the asset side of a balance sheet and the deposits on the liability side. When long-term loans are held with short-term deposits, assets are much more sensitive to interest-rate changes than the corresponding liabilities.
Bureau of Labor Statistics (BLS)
Definition: The length of time in weeks (through the current reference week) that persons classified as unemployed had been looking for work. For persons on layoff who are counted as unemployed (see definition of Unemployed below), duration of unemployment represents the number of full weeks they had been on layoff. The data do not represent completed spells of unemployment.
Earned income
Earned income credit
Earnings
Bureau of Labor Statistics (BLS)
Definition: Remuneration (pay, wages) of a worker or group of workers for services performed during a specific period of time. The term invariably carries a defining word or a combination; e.g., straight-time average hourly earnings. Since a statistical concept is usually involved in the term and its variations, the producers and users of earnings data have an obligation to define them. In the absence of such definition, the following may serve as rough guides: Hourly, daily, weekly, annual–Period of time to which earnings figures, as stated or computed, relate. The context in which annual earnings (sometimes weekly earnings) are used may indicate whether the reference includes earnings from one employer only or from all employment plus other sources of income; average–usually the arithmetic mean; that is, total earnings (as defined) of a group of workers (as identified) divided by the number of workers in the group; gross–usually total earnings, before any deductions (such as tax withholding) including, where applicable, overtime payments, shift differentials, production bonuses, cost-of-living allowances, commissions, etc.; straight-time–usually gross earnings excluding overtime payments and (with variations at this point) shift differentials and other monetary payments (Also see Wages and Salaries).
Easy money policy
ECI
Related Term(s): Employment cost index (ECI)
E-commerce
Econometric model
Economic and Monetary Union (EMU)
Economic growth
Economics: Principles & Practices
Definition: Sustained period during which a nation’s total output of goods and services increases
Definition: Referred to in CBO reports as EGTRRA, it was signed into law on June 7, 2001. The law significantly reduces tax liabilities (the amount of tax owed) over the 2001-2010 period by cutting individual income tax rates, increasing the child credit, repealing estate taxes, raising deductions for married couples, increasing tax benefits for pensions and individual retirement accounts, and creating additional tax benefits for education. The law phases in many of those changes over time, including some that are not fully effective until 2010. All of the law’s provisions are now scheduled to expire at or before the end of 2010.
Definition: Profits of corporations, adjusted to remove the distortions in depreciation allowances caused by tax rules and to exclude the effect of inflation on the value of inventories. Economic profits are a better measure of profits from current production than are the book profits reported by corporations. (BEA) See also book profits and depreciation.
Related Term(s): Book profits, Depreciation
Related Term(s): Economic system
Federal Reserve Bank of Minneapolis
Definition: Corporation chartered by the Federal Reserve to engage in international banking. The Board of Governors acts on applications to establish Edge Act corporations and also examines the corporations and their subsidiaries. Named after Senator Walter Edge of New Jersey, who sponsored the original legislation to permit formation of such organizations. See also agreement corporation.
Federal Reserve Bank of San Francisco
Definition: Corporation chartered by the Federal Reserve to engage in international banking. The Board of Governors acts on applications to establish Edge Act corporations and also examines the corporations and their subsidiaries. Named after Senator Walter Edge of New Jersey, who sponsored the original legislation to permit formation of such organizations. See also agreement corporation.
Related Term(s): Agreement corporation
Bureau of Labor Statistics (BLS)
Definition: The highest diploma or degree, or level of work towards a diploma or degree, an individual has completed.
Definition: Data on educational attainment are derived from a single question that asks, ”What is the highest grade of school…has completed, or the highest degree…has received?” The single educational attainment question now in use was introduced in the CPS beginning January 1992, and is similar to that used in the 1990 Decennial Census of Population and Housing. Consequently, data on educational attainment from the 1992 CPS are not directly comparable to CPS data from earlier years. The new question replaces the previous two-part question used in the CPS that asked respondents to report the highest grade they had attended, and whether or not they had completed that grade. The questions on educational attainment apply only to progress in ”regular” schools. Such schools include graded public, private, and parochial elementary and high schools (both junior and senior high schools), colleges, universities, and professional schools, whether day schools or night schools. Thus, regular schooling is that which may advance a person toward an elementary school certificate or high school diploma, or a college, university, or professional school degree. Schooling in other than regular schools was counted only if the credits obtained are regarded as transferable to a school in the regular school system.
Definition: The ratio of taxes paid to a given tax base. For individual income taxes, the effective tax rate is typically expressed as the ratio of taxes to adjusted gross income. For corporate income taxes, it is the ratio of taxes to book profits. For some purposes–such as calculating an overall tax rate on all income sources–an effective tax rate is computed on a base that includes the untaxed portion of Social Security benefits, interest on tax-exempt bonds, and similar items. The effective tax rate is a useful measure because the tax code’s various exemptions, credits, deductions, and tax rates make actual ratios of taxes to income very different from statutory tax rates. See also adjusted gross income and book profits.
Related Term(s): Adjusted gross income (AGI), Book profits
Internal Revenue Service (IRS)
Definition: The transmission of tax information directly to the IRS using telephones or computers. Electronic filing options include (1) TeleFile using a touch-tone telephone, (2) Online self-prepared using a personal computer and tax preparation software, or (3) using a tax professional. Electronic filing may take place at the taxpayer’s home, a volunteer site, the library, a financial institution, the workplace, malls and stores, or a tax professional’s place of business.
Internal Revenue Service (IRS)
Definition: The Authorized IRS e-file Provider that originates the electronic submission of an income tax return to the IRS. EROs may originate the electronic submission of income tax returns they either prepared or collected from taxpayers. Some EROs charge a fee for submitting returns electronically.
Bureau of Labor Statistics (BLS)
Definition: Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees, worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.
Bureau of Labor Statistics (BLS)
Definition: A person or business that employees one or more people for wages or salary; the legal entity responsible for payment of quarterly unemployment insurance taxes or for reimbursing the state fund for unemployment insurance benefits costs in lieu of paying the quarterly taxes.
Bureau of Economic Analysis (BEA)
Definition: Contributions consisting of employer payments (including payments-in-kind) to private pension and profit-sharing plans, publicly administered government employee retirement plans, private group health and life insurance plans, privately administered workers’ compensation plans, and supplemental unemployment benefit plans, formerly called “other labor income.”
Definition: An index of the weighted-average cost of an hour of labor–comprising the cost to the employer of wage and salary payments, employee benefits, and contributions for social insurance programs. The ECI is structured so that it is affected by changes in the mix of occupations as well as changes in employment by industry. (BLS)
Bureau of Labor Statistics (BLS)
Definition: Often referred to as total compensation cost (see Total Compensation). The National Compensation Survey program publishes data on trends in employment costs, including quarterly and annual percent changes in labor cost (Employment Cost Index) and employer costs per hour worked for each component of compensation (Employer Cost for Employee Compensation).
Related Term(s): Total compensation (Employment Cost Index)
Federal Reserve Bank of Minneapolis
Definition: The percentage of the labor force that is employed. The employment rate is one of the economic indicators that economists examine to help understand the state of the economy. See also unemployment rate.
Federal Reserve Bank of San Francisco
Definition: The percentage of the labor force that is employed. The employment rate is one of the economic indicators that economists examine to help understand the state of the economy. See also unemployment rate.
Related Term(s): Unemployment rate
Bureau of Economic Analysis (BEA)
Definition: A business, service, or membership organization consisting of one or more establishments under common, direct or indirect, ownership or control. It is the highest level of establishment aggregation. An enterprise may vary in composition, ranging from a single- establishment company to a complex family of parent and subsidiary companies (firms under common ownership or control).
Economics: Principles & Practices
Definition: Program or benefit using established eligibility requirements to provide health, nutritional, or income supplements to individuals
Office of Management and Budget
Definition: An entitlement program is one in which the federal government is legally obligated to make payments or provide aid to any person who meets the legal criteria for eligibility. Examples include Social Security, Medicare, Medicaid, and Food Stamps.
Definition: A legal obligation on the federal government to make payments to a person, business, or unit of government that meets the criteria set in law. The Congress generally controls entitlement programs by setting eligibility criteria and benefit or payment rules–not by providing budget authority in an appropriation act. The source of funding to liquidate the obligation may be provided in either the authorization act that created the entitlement or a subsequent appropriation act. The best-known entitlements are the major benefit programs, such as Social Security and Medicare. See also appropriation act, authorization act, budget authority, and direct spending.
Citizen’s Guide to the Federal Budget
Definition: An entitlement is a program that legally obligates the Federal Government to make payments to any person who meets the legal criteria for eligibility. Examples include Social Security, Medicare, and Medicaid.
Federal Reserve Bank of Cleveland
Definition: An entitlement is a program that legally obligates the federal government to make direct payments to any person who meets the legal criteria for eligibility. Examples include Social Security, Medicare, and Medicaid. Entitlements make up nearly half of all federal government spending (interest on the debt makes up most of the other half).
Federal Reserve Bank of San Francisco
Definition: The rate that would be consistent with the full employment of labor and industrial capacity, and with real GDP being at its long-run potential level. This rate is needed as a benchmark to judge whether a given real interest rate is expansionary or contractionary.
Bureau of Economic Analysis (BEA)
Definition: Investment in equipment and software consists of capital account purchases of new machinery, equipment, furniture, vehicles, and computer software; dealers’ margins on sales of used equipment; and net purchases of used equipment from government agencies, persons, and the rest of the world. Own-account production of computer software is also included.
Related Term(s): Fixed investment, Nonresidential fixed investment
Bureau of Economic Analysis (BEA)
Definition: Equity capital increases and decreases. Equity capital increases consist of payments by parent companies to third parties abroad for the purchase of capital stock or other equity interests when they acquire an existing business, payments made to acquire additional ownership interests in their affiliates, and capital contributions to their affiliates. Equity capital decreases are funds that parent companies receive (except from distributions of earnings) when they reduce their equity interest in their affiliates.
Related Term(s): Direct investment capital flows
Bureau of Labor Statistics (BLS)
Definition: The physical location of a certain economic activity, for example, a factory, mine, store, or office. Generally a single establishment produces a single good or provides a single service. An enterprise (a private firm, government, or non-profit organization) could consist of a single establishment or multiple establishments. A multi-establishment enterprise could have all its establishments in one industry (i.e., a chain), or could have various establishments in different industries (i.e., a conglomerate).
Bureau of Economic Analysis (BEA)
Definition: An economic unit–business or industrial–at a single geographic location, where business is conducted or where services or industrial operations are performed. An establishment is not necessarily identical to an enterprise or company, which may consist of one or more establishments.
Definition: People of Hispanic origin were identified by a question that asked for self-identification of the persons’ origin or descent. Respondents were asked to select their origin (and the origin of other household members) from a ”flash card” listing ethnic origins. People of Hispanic origin, in particular, were those who indicated that their origin was Mexican, Puerto Rican, Cuban, Central or South American, or some other Hispanic origin. It should be noted that people of Hispanic origin may be of any race. People who were Non-Hispanic White origin, were identified by crossing the responses to two self-identification questions: (1) origin or descent and (2) race. Respondents were asked to select their race (and the race of other household members) from a ”flash card” listing racial groups. Beginning with March 1989, the population is divided into five groups on the basis of race: White, Black, American Indian, Eskimo or Aleut, Asian or Pacific Islander, and Other races. The last category includes any other race except the four mentioned. Respondents who selected their race as White and indicated that their origin was not one of the Hispanic origin subgroups Mexican, Puerto Rican, Cuban, Central or South American, were called Non-Hispanic White origin.
Federal Reserve Bank of Cleveland
Definition: Deposits denominated in U.S. dollars at banks and other financial institutions outside the United States. Although this name originated because of the large amounts of such deposits held at banks in Western Europe, similar deposits in other parts of the world are also called Eurodollars.
Federal Reserve Bank of Minneapolis
Definition: Deposits denominated in U.S. dollars at banks and other financial institutions outside the United States. Although this name originated because of the large amounts of such deposits held at banks in Western Europe, similar deposits in other parts of the world are also called Eurodollars.
Federal Reserve Bank of San Francisco
Definition: Deposits denominated in U.S. dollars at banks and other financial institutions outside the United States. Although this name originated because of the large amounts of such deposits held at banks in Western Europe, similar deposits in other parts of the world are also called Eurodollars.
Definition: The number of units of a foreign currency that can be bought with one unit of the domestic currency, or vice versa.
Federal Reserve Bank of Cleveland
Definition: The price of a country’s currency in terms of another country’s currency.
Internal Revenue Service (IRS)
Definition:A tax on the sale or use of specific products or transactions.
Federal Reserve Bank of Cleveland
Definition: A security that is exempted from most provisions of the securities laws, including the margin rules. Such securities include U.S. government and agency securities, municipal securities designated by the SEC.
Internal Revenue Service (IRS)
Definition: Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions-personal and dependency. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
Internal Revenue Service (IRS)
Definition: Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions-personal and dependency. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
Internal Revenue Service (IRS)
Definition: Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions-personal and dependency. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
Federal Reserve Bank of San Francisco
Definition: A policy of the Federal Reserve System that is designed to expand the growth of money and credit in the economy. See also monetary policy.
Related Term(s): Monetary policy
Definition: An account established within federal funds and trust funds to record appropriations, obligations, and outlays usually financed from the associated receipt account. See also federal funds, receipt account, and trust funds.
Related Term(s): Federal funds, Receipt account, Trust funds
Bureau of Labor Statistics (BLS)
Definition: Expenditures consist of the transaction costs, including excise and sales taxes, of goods and services acquired during the interview or recordkeeping period. Expenditure estimates include expenditures for gifts, but exclude purchases or portions of purchases directly assignable to business purposes. Also excluded are periodic credit or installment payments on goods or services already acquired. The full cost of each purchase is recorded even though full payment may not have been made at the date of purchase. Expenditure categories include: Food, alcoholic beverages, housing, apparel and services, transportation, health care, entertainment, personal care products and services, reading, education, tobacco products and smoking supplies, miscellaneous, cash contributions, and personal insurance and pensions).
Bureau of Labor Statistics (BLS)
Definition: A domestic good or service that is sold (export sale) abroad. Exports include government and non-government goods and services; however they exclude goods and services to the U.S. military, diplomatic, and consular institutions abroad. Exports do include goods and services that were previously imported.
Bureau of Labor Statistics (BLS)
Definition: A sale is the price paid for the good or service, free alongside ship, as well as the inland freight, insurance, and other charges to transport the good or service to the carrier leaving the U.S. The sale price does not include the costs incurred after the good or service leaves the U.S. A sale, therefore, does not include personal and household movements of travelers and in-transit shipments.
Fact-finding
Factor income
Bureau of Economic Analysis (BEA)
Definition: Labor and property earnings from current production. In national income, it is the incomes accruing to labor and property of U.S. residents, which include compensation of employees (received), proprietors’ income, rental income of persons, and corporate profits.
Factor market
Factors of production
Family
Economics: Principles & Practices
Definition: Two or more persons living together that are related by blood, marriage, or adoption
Definition: A family is a group of two people or more (one of whom is the householder) related by birth, marriage, or adoption and residing together; all such people (including related subfamily members) are considered as members of one family. Beginning with the 1980 Current Population Survey, unrelated subfamilies (referred to in the past as secondary families) are no longer included in the count of families, nor are the members of unrelated subfamilies included in the count of family members. The number of families is equal to the number of family households, however, the count of family members differs from the count of family household members because family household members include any non-relatives living in the household.
Family group
Definition: A family group is any two or more people (not necessarily including a householder) residing together, and related by birth, marriage, or adoption. A household may be composed of one such group, more than one, or none at all. The count of family groups includes family households, related subfamilies, and unrelated subfamilies.
Family household
Definition: A family household is a household maintained by a householder who is in a family (as defined above), and includes any unrelated people (unrelated subfamily members and/or secondary individuals) who may be residing there. The number of family households is equal to the number of families. The count of family household members differs from the count of family members, however, in that the family household members include all people living in the household, whereas family members include only the householder and his/her relatives. See the definition of family.
Related Term(s): Family
Fannie Mae
Federal Reserve Bank of Cleveland
Definition: Fannie Mae (the Federal National Mortgage Association) is one of the three federally-sponsored enterprises charged with providing funding and expanding access to the housing-finance market. In addition to purchasing loans directly from mortgage banks and other lenders, Fannie Mae also guarantees pools of mortgages against default, thereby making the secondary mortgage market more liquid.
Federal Advisory Council – FAC
Federal Reserve Bank of San Francisco
Definition: An advisory group consisting of one member, usually a banker, from each Federal Reserve District. Members are elected annually by the Reserve Bank boards of directors. Members meet with the Federal Reserve Board at least four times a year to make recommendations on business and financial issues relating to banking, but have no real power.
Federal Reserve Bank of Cleveland
Definition: This group consists of one member from each Federal Reserve District (usually a banker) elected annually by the Board of Directors of each of the 12 Federal Reserve Banks. They meet with the Board to discuss business and financial conditions and make advisory recommendations.
Federal Reserve Bank of Minneapolis
Definition: Advisory group made up of one representative (in most cases a banker) from each of the 12 Federal Reserve districts. Established by the Federal Reserve Act, the council meets periodically with the Board of Governors to discuss business and financial conditions and make recommendations.
SSI Annual Statistical Report, 2002
Definition: The basic benefit standards used in computing the amount of federal SSI payments. Benefit levels differ for individuals and couples living in households and for persons in Medicaid institutions. Individuals or couples living in their own household receive the full federal benefit. The federal benefit is reduced by one-third if an individual or couple is living in another person’s household and receiving support and maintenance there. The federal benefit rates are increased annually to reflect increases in the cost of living.
Federal Reserve Bank of Cleveland
Definition: When the government spends more than it collects in revenues during a given fiscal year, its budget incurs a deficit. Because the government must borrow money to pay the deficit, it acquires debt (and the interest on that debt), which must be repayed at some point. If deficits occur over successive years, as they have in the previous few decades, more money must be borrowed and the debt grows.
Economics: Principles & Practices
Definition: Total amount of money the federal government has borrowed from others
Office of Management and Budget
Definition: Debt Held by the Public—The cumulative amount of money the federal government has borrowed from the public and not repaid. See also debt held by government accounts and debt limit.
Citizen’s Guide to the Federal Budget
Definition: The gross Federal debt is divided into two categories: debt held by the public, and debt the Government owes itself. Another category is debt subject to legal limit. (1) ”Debt Held by the Public” is the total of all Federal deficits, minus surplus, over the years. This is the cumulative amount of money the Federal Government has borrowed from the public, through the sale of notes and bonds of varying sizes and time periods until maturity. (2) ”Debt the Government Owes Itself” is the total of all trust fund surpluses over the years, like the Social Security surplus, that the law says must be invested in Federal securities. (3) ”Debt Subject to Legal Limit” is roughly the same as gross Federal debt, is the maximum amount of Federal securities that may be legally outstanding at any time. When the limit is reached, the President and Congress must enact a law to increase it.
Federal Reserve Bank of San Francisco
Definition: An independent deposit insurance agency created by Congress in 1933 to maintain stability and public confidence in the nation’s banking system. The FDIC promotes safety and soundness of insured depository institutions and the U.S. financial system by identifying, monitoring, and addressing risks to the deposit insurance funds; minimizes disruptive effects from the failure of banks and savings associations; and ensures fairness in the sale of financial products and provision of financial services.
Federal Reserve Bank of Cleveland
Definition: An agency of the federal government that insures accounts at most commercial banks and mutual savings banks. The FDIC also has primary federal supervisory authority over insured state banks that are not members of the Federal Reserve System.
Federal Reserve Bank of Minneapolis
Definition: An independent deposit insurance agency created by Congress in 1933 to maintain stability and public confidence in the nation’s banking system. The FDIC promotes safety and soundness of insured depository institutions and the U.S. financial system by identifying, monitoring and addressing risks to the deposit insurance funds; minimizes disruptive effects from the failure of banks and savings associations; and ensures fairness in the sale of financial products and the provision of financial services.
Definition: Part of the budgeting and accounting structure of the federal government. Federal funds are all funds that make up the federal budget except those classified by law as trust funds. Federal funds include several types of funds, one of which is the general fund. See also general fund; compare with trust funds.
Federal Reserve Bank of Cleveland
Definition: Reserve balances that depository institutions lend each other, usually on an overnight basis. In addition, Federal funds include certain other kinds of borrowings by depository institutions from each other and from federal agencies.
Federal Reserve Bank of Minneapolis
Definition: Short-term transactions in immediately available funds between depository institutions and certain other institutions that maintain accounts with the Federal Reserve; usually not collateralized.
Federal Reserve Bank of San Francisco
Definition: Short-term transactions in immediately available funds between depository institutions and certain other institutions that maintain accounts with the Federal Reserve; usually not collateralized.
Related Term(s): General fund, Trust funds
Definition: The interest rate that financial institutions charge each other for overnight loans of their monetary reserves. A rise in the federal funds rate (compared with other short-term interest rates) suggests a tightening of monetary policy, whereas a fall suggests an easing. (FRB) See also monetary policy and short-term interest rate.
Related Term(s): Monetary policy, Short-term interest rate
Federal Reserve Bank of Cleveland
Definition: The interest rate at which banks borrow federal funds from each other, usually on an overnight basis. Banks use the money to make up for temporary shortfalls in reserve balances.
Federal Reserve Bank of Minneapolis
Definition: The federal funds rate is the interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. The rate may vary from depository institution to depository institution and from day to day.
Federal Reserve Bank of San Francisco
Definition: The agency of the federal government that supervises all federal savings and loan associations and federally insured state-chartered savings and loan associations. The FHLBB also operates the Federal Savings and Loan Insurance Corporation, which insures accounts at federal savings and loan associations and those state-chartered associations that apply and are accepted. In addition, the FHLBB directs the Federal Home Loan Bank System, which provides a flexible credit facility for member savings institutions to promote the availability of home financing. The FHL Banks also own the Federal Home Loan Mortgage Corporation, established in 1970 to promote secondary markets for mortgages.
Federal Reserve Bank of Cleveland
Definition: A broker’s demand upon a customer for cash, or securities needed to satisfy the required Regulation T down payment for a purchase or short sale of securities.
Definition: The group within the Federal Reserve System that determines the direction of monetary policy. The open market desk at the Federal Reserve Bank of New York implements that policy with open market operations (the purchase or sale of government securities), which influence short-term interest rates–especially the federal funds rate–and the growth of the money supply. The committee is composed of 12 members, including the seven members of the Board of Governors of the Federal Reserve System, the president of the Federal Reserve Bank of New York, and a rotating group of four of the other 11 presidents of the regional Federal Reserve Banks. See also federal funds rate, Federal Reserve System, monetary policy, money supply, and short-term interest rate.
Related Term(s): Federal funds rate, Federal Reserve System, Monetary policy, Money supply, Short-term interest rate
Federal Reserve Bank of Cleveland
Definition: A 12-member committee consisting of the seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank presidents. The president of the Federal Reserve Bank of New York is a permanent member while the other Federal Reserve presidents serve on a rotating basis. The Committee sets objectives for the growth of money and credit that are implemented through purchases and sales of U.S. government securities in the open market. The FOMC also establishes policy relating to System operations in the foreign exchange markets.
Federal Reserve Bank of Minneapolis
Definition: Twelve-member committee made up of the seven members of the Fed’s Board of Governors; the president of the Federal Reserve Bank of New York; and, on a rotating basis, the presidents of four other Reserve Banks. The FOMC meets eight times a year to set Federal Reserve guidelines regarding the purchase and sale of government securities in the open market as a means of influencing the volume of bank credit and money in the economy. It also establishes policy relating to System operations in the foreign exchange markets.
Federal Reserve Bank of Cleveland
Definition: One of the twelve operating arms of the Federal Reserve System, located throughout the nation, that together with their twenty-five Branches carry out various System functions.
Federal Reserve Bank of Minneapolis
Definition: One of the 12 operating arms of the Federal Reserve System, located throughout the nation, that together with their 25 branches carry out various System functions, including operating a nationwide payments system, distributing the nation’s currency and coin, supervising and regulating member banks and bank holding companies and serving as banker for the U.S. Treasury.
Federal Reserve Bank of San Francisco
Definition: One of the twelve operating arms of the Federal Reserve System, located throughout the nation, that together with their twenty-five Branches carry out various System functions, including operating a nationwide payments system, distributing the nation’s currency and coin, supervising and regulating member banks and bank holding companies, and serving as banker for the U.S. Treasury.
Federal Reserve Bank of Cleveland
Definition: Checkbook money that for a period of time appears on the books of both the payer and payee due to the lag in the collection process. Federal Reserve float often arises during the Federal Reserve’s check collection process. In order to promote an efficient payments mechanism with certainty as to the date funds become available, the Federal Reserve has employed the policy of crediting the reserve accounts of depository institutions depositing checks according to an availability schedule before the Federal Reserve is able to obtain payment from others.
Federal Reserve Bank of Minneapolis
Definition: Float is checkbook money that appears on the books of both the check writer (the payor) and the check receiver (the payee) while a check is being processed. Federal Reserve float is float present during the Federal Reserve’s check collection process. To promote efficiency in the payments system and provide certainty about the date that deposited funds will become available to the receiving depository institutions (and the payee), the Federal Reserve credits the reserve accounts of banks that deposit checks according to a fixed schedule. However, processing certain checks and collecting funds from the banks on which these checks are written may take more time than the schedule allows. Therefore, the accounts of some banks may be credited before the Federal Reserve is able to collect payment from other banks, resulting in Federal Reserve float.
Federal Reserve Bank of San Francisco
Definition: Checkbook money that, for a period of time, appears on the books of both the payor and payee due to the lag in the collection process. Federal Reserve float often arises during the Federal Reserve’s check collection process. In order to promote an efficient payments mechanism with certainty as to the date funds become available, the Federal Reserve has employed the policy of crediting the reserve accounts of depository institutions depositing checks (the payee) according to an availability schedule before the Federal Reserve is able to obtain payment from the payor.
Economics: Principles & Practices
Definition: Currency issued by the Fed that eventually replaced all other types of federal currency
Federal Reserve Bank of Minneapolis
Definition: Currency issued by the Federal Reserve. Nearly all of the nation’s circulating paper currency consists of Federal Reserve notes printed by the Bureau of Engraving and Printing and issued to the Federal Reserve Banks which put them into circulation through commercial banks and other depository institutions. Federal Reserve notes are obligations of the U.S. government.
Federal Reserve Bank of Cleveland
Definition: Nearly all of the nation’s circulating paper currency consists of Federal Reserve notes printed by the Bureau of Engraving and Printing and issued to the Federal Reserve Banks which put them into circulation through commercial banks and other depository institutions. Federal Reserve notes are obligations of the U.S. government.
Federal Reserve Bank of San Francisco
Definition: Nearly all of the nation’s circulating paper currency consists of Federal Reserve notes printed by the Bureau of Engraving and Printing and issued to the Federal Reserve Banks to put into circulation through commercial banks and other depository institutions. Federal Reserve notes are obligations of the U.S. government.
Economics: Principles & Practices
Definition: privately owned, publicly controlled, central bank of the United States (p.301)
Definition: The central bank of the United States. The Federal Reserve is responsible for conducting the nation’s monetary policy and overseeing credit conditions. See also central bank, monetary policy, and short-term interest rate.
Federal Reserve Bank of Cleveland
Definition: The central bank of the United States created by Congress, consisting of a seven-member Board of Governors in Washington, D.C., 12 regional Reserve Banks, and depository institutions that are subject to reserve requirements. All national banks are members and state chartered banks may elect to become members. State member banks are supervised by the Board of Governors and the Reserve Banks. Reserve requirements established by the Federal Reserve Board apply to nonmember depository institutions as well as member banks. Both classes of institutions have access to Federal Reserve discount borrowing privileges and Federal Reserve services on an equal basis.
Federal Reserve Bank of Cleveland
Definition: The Federal Reserve funds transfer system. Fedwire is used for transferring reserve account balances of depository institutions and government securities. Fedwire is also used for the settlement of other clearing systems, such as CHIPS.
Federal Reserve Bank of San Francisco
Definition: Electronic funds transfer network operated by the Federal Reserve. Fedwire is usually used to transfer large amounts of funds and U.S. government securities from one institution’s account at the Federal Reserve to another institution’s account. It is also used by the U.S. Department of the Treasury and other federal agencies to collect and disburse funds.
Federal Reserve Bank of Cleveland
Definition: Money that is not backed by gold or any other commodity. It has little or no intrinsic value as a commodity and it is relatively costless to produce, usually taking the form of tokens or pieces of paper. It is money by virtue of a legal declaration as such.
Economics: Principles & Practices
Definition: Money by government decree; has no alternative value or use as a commodity
Bureau of Economic Analysis (BEA)
Definition: The third estimate of gross domestic product (GDP) and its components for a quarter. It is released 85-90 days after the end of the quarter, and it is based on source data that are more detailed and comprehensive than the preliminary estimate. The final estimate is still subject to later revisions.
Related Term(s): Preliminary estimate
Bureau of Economic Analysis (BEA)
Definition: Final-demand components for goods and services, which consist of personal consumption expenditures (PCE); gross private fixed investment; change in private inventories; exports of goods and services; imports of goods and services, and government consumption expenditures and gross investment.
Related Term(s): Input-output (I-O) accounts
Bureau of Economic Analysis (BEA)
Definition: Investment in equipment and software consists of capital account purchases of new machinery, equipment, furniture, vehicles, and computer software; dealers’ margins on sales of used equipment; and net purchases of used equipment from government agencies, persons, and the rest of the world. Own-account production of computer software is also included.
Related Term(s): Open-end lease
Bureau of Economic Analysis (BEA)
Definition: Record of transactions between U.S. residents and foreign residents resulting in changes in the level of international claims or liabilities, such as in deposits, ownership of portfolio investment securities, and direct investment.
Related Term(s): Balance of payments, Current account (international)
Financial asset
Financial asset
Bureau of Economic Analysis (BEA)
Definition: Deposits, stocks, bonds, notes, currencies, and other instruments that possess value and give rise to claims, liabilities, or equity investment. Financial assets include bank loans, direct investments, and official private holdings of debt and equity securities and other instruments. When the holder resides in a country that is different from the issuer of the instrument, it is included in the international investment position of both countries.
Bureau of Economic Analysis (BEA)
Definition: Deposits, stocks, bonds, notes, currencies, and other instruments that possess value and give rise to claims, liabilities, or equity investment. Financial assets include bank loans, direct investments, and official private holdings of debt and equity securities and other instruments. When the holder resides in a country that is different from the issuer of the instrument, it is included in the international investment position of both countries.
Related Term(s): Financial account (international), International investment position (IIP) of the United States
Federal Reserve Bank of San Francisco
Definition: A financial entity engaged in a broad range of banking-related activities, created by the Gramm-Leach-Bliley Act of 1999. These activities include: insurance underwriting, securities dealing and underwriting, financial and investment advisory services, merchant banking, issuing or selling securitized interests in bank-eligible assets, and generally engaging in any non-banking activity authorized by the Bank Holding Company Act. The Federal Reserve Board is responsible for supervising the financial condition and activities of financial holding companies. Similarly, any non-bank commercial company that is predominantly engaged in financial activities, earning 85% or more of its gross revenues from financial services, may choose to become a financial holding company. These companies are required to sell any non-financial (commercial) businesses within ten years.
Federal Reserve Bank of Cleveland
Definition: An institution that uses its funds chiefly to purchase financial assets (loans, securities) as opposed to tangible property. Financial institutions can be classified according to the nature of the principal claims they issue nondeposit intermediaries include, among others, life and property/casualty insurance companies and pension funds, whose claims are the policies they sell, or the promise to provide income after retirement; depository intermediaries obtain funds mainly by accepting deposits from the public. Although the major depository institutions historically have specialized in certain types of credit, the powers of nonbank depository institutions have been broadened in recent years. For example, NOW accounts, credit union share drafts, and other services similar to checking accounts may be offered by thrift institutions.
Federal Reserve Bank of Minneapolis
Definition: An institution that uses its funds chiefly to purchase financial assets (loans, securities) as opposed to tangible property. Financial institutions can be classified according to the nature of the principal claims they issue. See also depository institution.
Federal Reserve Bank of San Francisco
Definition: An institution that uses its funds chiefly to purchase financial assets (loans, securities) as opposed to tangible property. Financial institutions can be classified according to the nature of the principal claims they issue. See also depository institution.
Internal Revenue Service (IRS)
Definition: Spending and income records and items to keep for tax purposes, including paycheck stubs, statements of interest or dividends earned, and records of gifts, tips, and bonuses. Spending records include canceled checks, cash register receipts, credit card statements, and rent receipts.
Definition: A nonbudgetary account associated with a credit program that holds balances, receives credit subsidy payments from the program account, and includes all cash flows resulting from obligations or commitments made under the program since October 1, 1991. The transactions reflected in the financing account are considered a means of financing. See also credit subsidy, means of financing, and program account; compare with liquidating account.
Related Term(s): Credit subsidy, Liquidating account, Means of Financing, Program account
Federal Reserve Bank of Cleveland
Definition: Services performed by the Federal Reserve Banks for the U.S. government. These include maintaining deposit accounts for the Treasury Department, paying U.S. government checks drawn on the Treasury, and issuing and redeeming savings bonds and other government securities.
Federal Reserve Bank of Minneapolis
Definition: Services performed by the Federal Reserve Banks for the U.S. government. These include maintaining deposit accounts for the Treasury Department, paying U.S. government checks drawn on the Treasury, and issuing and redeeming savings bonds and other government securities.
Federal Reserve Bank of San Francisco
Definition: Services performed by the Federal Reserve Banks on behalf of the U.S. government. These include maintaining deposit accounts for the Treasury Department, paying U.S. government checks drawn on the Treasury, and issuing and redeeming savings bonds and other government securities.
Economics: Principles & Practices
Definition: Use of government spending and revenue collection measures to influence the economy
Economics: Principles & Practices
Definition: 12-month financial planning period that may not coincide with the calendar year; October 1 to September 30 for the federal government
Office of Management and Budget
Definition: The fiscal year is the federal government’s accounting period. It begins on October 1 and ends on September 30. For example, fiscal year 2003 begins on October 1, 2002 and ends on September 30, 2003.
Definition: A yearly accounting period. The federal government’s fiscal year begins October 1 and ends September 30. Fiscal years are designated by the calendar years in which they end–for example, fiscal year 2003 will begin October 1, 2002, and end September 30, 2003. The budget year is the fiscal year for which the budget is being considered. In relation to a session of Congress, it is the fiscal year that starts on October 1 of the calendar year in which that session of Congress begins. An out-year is a fiscal year following the budget year. The current year is the fiscal year in progress.
Bureau of Economic Analysis (BEA)
Definition: Produced assets that are used repeatedly, or continuously, in processes of production for an extended period of time. They consist of equipment and software and structures (including, by convention, owner-occupied housing), but exclude consumer durables.
Federal Reserve Bank of Cleveland
Definition: A system in which the values of different currencies are fixed relative to one another. This system existed in some form until 1973. See also Bretton Woods and floating exchange rates.
Related Term(s): Bretton Woods system, Floating exchange rates
Bureau of Economic Analysis (BEA)
Definition: Consists of purchases of residential and nonresidential structures and of equipment and software by private businesses, by nonprofit institutions, and by governments in the United States. (Owner-occupied housing is treated like a business in the NIPAs.)
Related Term(s): Nonresidential fixed investment, Residential fixed investment
Federal Reserve Bank of Cleveland
Definition: A traditional approach to determining the finance charge payable on an extension of credit. A predetermined and certain rate of interest is applied to the principal.
Economics: Principles & Practices
Definition: Proportional tax on individual income after a specified threshold has been reached
Related Term(s): Progressive tax, Proportional tax
Federal Reserve Bank of Cleveland
Definition: A system in which the values of different currencies are allowed to fluctuate against each other. Higher inflation in one country will cause the value of that country’s currency to fall relative to other currencies. See also fixed exchange rates.
Related Term(s): Fixed exchange rates
Economics: Principals and Practices
Definition: Government-issued coupons that can be exchanged for food
Bureau of Economic Analysis (BEA)
Definition: A foreign business enterprise in which there is U.S. direct investment–that is, in which a U.S. person, or entity, owns or controls 10 percent or more of the voting securities of an incorporated foreign business enterprise or an equivalent interest in an unincorporated foreign business enterprise.
Related Term(s): Foreign parent, Majority-owned foreign affiliate (MOFA), U.S. affiliate
Bureau of Economic Analysis (BEA)
Definition: or control, directly or indirectly, by one foreign person, or entity, of 10 percent or more of the voting securities of an incorporated U.S. business enterprise or an equivalent interest in an unincorporated U.S. business enterprise.
Related Term(s): Direct investment, Foreign parent, U.S. affiliate
Federal Reserve Bank of Minneapolis
Definition: The foreign exchange trading desk at the New York Federal Reserve Bank. The desk undertakes operations in the exchange markets for the account of the Federal Open Market Committee, and as agent for the U.S. Treasury and for foreign central banks.
Federal Reserve Bank of San Francisco
Definition: The foreign exchange trading desk at the New York Federal Reserve Bank. The desk undertakes operations in the exchange markets for the account of the Federal Open Market Committee, and acts as agent for the U.S. Treasury and for foreign central banks.
Federal Reserve Bank of San Francisco
Definition: Purchase or sale of the currencies of other nations by a central bank for the purpose of influencing foreign exchange rates or maintaining orderly foreign exchange markets. Also called foreign currency operations.
Related Term(s): Foreign currency operations
Bureau of Economic Analysis (BEA)
Definition: The first person, or entity, outside the United States in a U.S. affiliate’s ownership chain that has a direct investment interest in the affiliate.
Related Term(s): Foreign affiliate, Foreign parent group, U.S. affiliate, U.S. parent, Ultimate beneficial owner (UBO)
Bureau of Economic Analysis (BEA)
Definition: Consists of the foreign parent and the ultimate beneficial owner (UBO) of a U.S. affiliate and other foreign companies affiliated with the foreign parent and ultimate beneficial owner. More specifically, the foreign parent group consists of (1) the foreign parent, (2) any foreign person, or entity, proceeding up the foreign parent’s ownership chain, that owns or controls more than 50 percent of the person below it, up to and including the ultimate beneficial owner, and (3) any foreign person, or entity, proceeding down the ownership chain(s) of each of these members, that is owned more than 50 percent by the person above it.
Bureau of Economic Analysis (BEA)
Definition: Individuals, governments, business enterprises, trusts, associations, and nonprofit organizations that fulfill two criteria: (1) They have their center of economic interest outside the United States, and (2) they reside, or expect to reside, outside the United States for one year or more. Included in this definition are U.S. individuals living abroad for one year or more who are not employed by the U.S. government, foreigners residing in the United States for less than one year, and foreign affiliates of U.S. companies. In addition, foreign nationals employed in the United States by their home governments, foreign students enrolled at U.S. educational institutions, and international institutions located in the United States are also considered foreign residents.
Federal Reserve Bank of Cleveland
Definition: A type of foreign exchange transaction where by a contract is made to exchange one currency for another at a fixed date in the future at a specified exchange rate. By buying or selling forward exchange, businesses protect themselves against a decrease in the value of a currency they plan to sell at a future date.
Federal Reserve Bank of Minneapolis
Definition: A type of foreign exchange transaction whereby a contract is made to exchange one currency for another at a fixed date in the future at a specified exchange rate. By buying or selling forward exchange, businesses protect themselves against a decrease in the value of a currency they plan to sell at a future date.
Federal Reserve Bank of San Francisco
Definition: A type of foreign exchange transaction whereby a contract is made to exchange one currency for another at a fixed date in the future at a specified exchange rate. By buying or selling forward exchange, businesses protect themselves against a decrease in the value of a currency they plan to sell at a future date.
Definition: The provision of budget authority that becomes available for obligation in the last quarter of a fiscal year and remains available during the following fiscal year. That form of funding typically finances ongoing education grant programs. See also budget authority and fiscal year; compare with advance appropriation and obligation delay.
Related Term(s): Advance appropriation, Budget authority, Fiscal year, Obligation delay
Federal Reserve Bank of Cleveland
Definition: A variant of the Taylor rules in which the funds rate responds to expected movements in future variables (for example, expected inflation).
Related Term(s): Taylor rules
Federal Reserve Bank of San Francisco
Definition: The Communications network of the Federal Reserve which interconnects Federal Reserve Bank offices, the Board of Governors, depository institutions, and the Treasury. It is used for Fedwire transfers and transfers of U.S. securities as well as for transfer of Federal Reserve administrative, supervisory, and monetary policy information.
Federal Reserve Bank of Cleveland
Definition: Freddie Mac (the Federal National Home Loan Mortgage Corporation) is another federally-sponsored secondary-market agency. Like Fannie Mae, Freddie Mac both purchases loans directly from the primary mortgage market and guarantees loans that are sold on the secondary market.
Economics: Principles & Practices
Definition: Unemployment caused by workers changing jobs or waiting to go to new ones
Federal Reserve Bank of San Francisco
Definition: Short-term joblessness associated with mobility. A person who leaves a job to find something better is considered frictionally unemployed. This type of unemployment characterizes workers subject to seasonal work (e.g., construction, agricultural, winter recreational workers, etc.).
Federal Reserve Bank of Minneapolis
Definition: Federal legislation that, among other things, specifies the primary objectives of U.S. economic policy—maximum employment, stable prices, and moderate long-term interest rates.
Related Term(s): Humphrey-Hawkins Act
Office of Management and Budget
Definition: Civilian employment in the Executive Branch is measured on the basis of full-time equivalents. One FTE is equal to one work year or 2,080 non-overtime hours. For example, one full-time employee counts as one FTE, and two half-time employees also count as one FTE.
Related Term(s): Federal funds rate (funds rate)
Economics: Principles & Practices
Definition: Contracts to buy or sell commodities or financial assets at a specific future date, using a price agreed upon today (p.333)
Federal Reserve Bank of Cleveland
Definition: Contracts that require delivery of a commodity of specified quality and quantity, at a specified price, on a specified future date. Commodity futures are traded on a commodity exchange and are used for both speculation and hedging.
Bureau of Economic Analysis (BEA)
Definition: Includes production by all Federal, state, and local government agencies except for government enterprises.
Related Term(s): Business sector, Households and institutions sector
Galloping inflation
Gasohol
Gasoline excise tax
GDI
Related Term(s): Gross domestic income (GDI)
GDP
Related Term(s): Gross domestic product (GDP)
GDP gap
GDP in constant dollars
Definition: A summary measure of the prices of all of the goods and services that make up gross domestic product. The change in the GDP price index is used as a measure of inflation in the overall economy. See also gross domestic product and inflation.
Related Term(s): Gross domestic product (GDP), Inflation
Federal Reserve Bank of Cleveland
Definition: A type of analysis which “looks at an economic system as a whole and observes the simultaneous determination of all prices and quantities of all goods and services in the economic system.” –Taken from The MIT Dictionary of Modern Economics, edited by David W. Pierce, Cambridge, Mass.: MIT Press, 1983.
Definition: One type of federal funds whose receipt account is credited with federal revenues and offsetting receipts not earmarked by law for a specific purpose and whose expenditure account records amounts provided in appropriation acts or other laws for the general support of the federal government. See also expenditure account, federal funds, and receipt account; compare with trust funds.
Related Term(s): Expenditure account, Federal funds, Receipt account, Trust funds
