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.
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Some common words found in the essay are:
M2= M1+savings, Negative Demand, TA TL, Aggregate Supply-P-Y, DEC Ms, Ms INC, Fiat Money, Auto Stabilizers=taxes, Stabilizer InitialT, INC GDP, inc inc, int rate, real gdp, dec inc, inc dec, price bonds, dec dec, unit cost inc, short run, price level, gdp inc, inc unit cost, bonds price bonds, cost inc inc, inc inc dec,
Approximate Word count = 931
Approximate Pages = 4 (250 words per page double spaced)
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