discount rate  the interest rate the Fed charges commercial banks
equation of exchange  an equation that relates the quantity of money to nominal GDP
federal funds rate  the interest rate a bank charges when it lends excess reserves to another bank
Federal Open Market Committee(FOMC)   the official policymaking body of the Federal Reserve System
FOMC directive  instructions issued by the FOMC to the Federal Reserve Bank of New York to implement monetary policy
foreign exchange market intervention  the buying and selling of currencies by a government or central bank to achieve a specified exchange rate
intermediate target  an objective used to achieve some ultimate policy goal
legal reserves  the cash a bank holds in its vault plus its deposit in the Fed
open market operations  the buying and selling of government bonds by the Fed to control bank reserves and the money supply
precautionary demand for money  the demand for money to cover unplanned transactions or emergencies
quantity theory of money  the theory that with constant velocity, changes in the quantity of money change nominal GDP
speculative demand for money  the demand for money created by uncertainty about the value of other assets
sterilization  the use of domestic open market operations to offset the effects of a foreign exchange market intervention on the domestic money supply
transactions demand for money  the demand to hold money to buy goods and services
velocity of money  the average number of times each dollar is spent on final goods and services in a year