Economics
Money-commodity money, Fiat. Money supply=currency in hands of public+other assetsas means of payment (demand deposits, traverler's checks, savings accounts, time deposits, mutual funds) M1=currency in hands of public+traverler's checks+demand deposits+other checkable deposits CU+CD M2= M1+savings account+small time deposits(<100,000),+non institutional(retail)money mkt. mutual funds M3= M2+Large term deposits(not insured)+institutional money market mutual funds+long term repos(repurchaseagreements, gov't securities)+Long term euro dollar deposits. Balance Sheet Assets= Cash in vault 1mil. Balance at Fed 5 mil.=reserves6mil. Bonds 10 mil. Loans 50 mil. Buildings 20 mil. Total Assets=86 mil. Liabilities=60mil. Savings deposits 10mil. Total Liab=70 mil Net worth= TA-TL=16 mil. Money sup= CU+[1/RRR]*(reserves) RRR=% of demand deposits Fed requires banks to hold as cash RRR=10% (.10)(60m)=6.0 RRRDD=res. DD=[1/RRR] (reserves) 1/RRR is demand deposit multiplier Probs. time lag+exact control over change depends on banks lending IF RRR dec, Ms would inc Chang in Ms=1/rrr(change in reserves) Money sup.=CU+DD or CU+[1/RRR]*(reserves) IF RRR inc Money sup dec. If RRR dec money inc.
AD shifts Leftward-gov't purchases, investment, autonomous, or net exports dec, or when taxes inc. Aggregate Supply-P-Y reletionship when input(factor) markets are in Equil. Demand Shocks-caused by spending shocks or by change in monetary policy As total output Increases-Greater amounts of inputs may be needed to produce a unit of out put, Price of non labor input rises, Nominal wage rises. in short run, inc in real GDP, by causing unit cost to inc, price inc Gov't Purchases inc-Fiscal policy-AE inc, Y inc, Md inc, r inc, P inc, AD inc, P inc
Some common words found in the essay are:
TA TL, M2= M1+savings, Fiat Money, , int rate, short run,
Approximate Word count = 931
Approximate Pages = 4 (250 words per page double spaced)
|
