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| [J] joint float An arrangement by which a group of currencies maintain a fixed relationship relative to each other, but move jointly relative to another currency in response to supply and demand conditions in the exchange market. [K] Keynesian Economics An economic theory originated by the British economist John Maynard Keynes and his followers. Keynes maintained that governments should use the power of the budget to maintain economic growth and stability and overcome the recessionary cycles common in most western economies. key rate The interest rate that controls, either directly or indirectly, bank lending rates and the cost of credit paid by borrowers. [L] lender of last resort As the nation's central bank, the Federal Reserve has the authority and financial resources to act as 'lender of last resort' by extending credit to depository institutions or to other entities in unusual circumstances involving a national or regional emergency, where failure to obtain credit would have a severe adverse impact on the economy. liquidity (1) The ability of a bank or business to meet its current obligations; (2) the quality that makes an asset quickly and readily convertible into cash. long-term interest rates Interest rates on loan contracts--or debt instruments such as Treasury bonds or utility, industrial, or municipal bonds--having maturities greater than one year. Often called capital market rates. |
| BUSINESS DICTIONARY |