fiat money central bank the bank that implements a governments monetary policy and regulates commercial banks monetary policy the actions of the Federal Reserve to influence real GDP and the inflation rate in the economy Federal Open Market a Federal Reserve committee that makes key decisions regarding interest rates and the Committee (FOMC) growth of the US money supply discount rate federal funds rate the interest rate banks charge each other for overnight loans open market the buying and selling of government securities to alter the money supply in the economy operations required reserve ratio the fraction of deposits that the Federal Reserve requires banks to keep on hand as cash reserve Bank government security a tradable financial instrument issued by the federal or a state government Board of Governors a seven-member board that oversees the Federal Reserve System