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VERY LONG RUN: A period of time in which all inputs in the production process are variable and the technology and assorted social institutions affecting production can change. You should compare very long run with long run and production, short run and production, and market period.
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Lesson Contents
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Unit 1: What It Is |
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Unit 2: Banking Details |
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Unit 3: Reserve Banking |
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Unit 4: Regulating Banks |
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Unit 5: The Economy | |
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Banking
In this lesson, we take a look at the role banking plays in the macroeconomy. Banking is most important to the study of macroeconomics because a substantial fraction of the economy's money supply is under the direct control of commercial banks (as opposed to government). Because government needs to control the money supply to promote business-cycle stability, they need to control banks control of the money supply. As such, we need to take a look at how banks operate, including how they issue the deposits that make up the money supply. - The first unit opens this lesson with an overview of banks and the banking system, including their role as financial intermediaries.
- Moving into the second unit, we take a closer look at the banking system, especially the four basic types of banks (banks, savings and loans, credit unions, and mutual savings banks) and the assorted assets and liabilities of a typical bank.
- The key banking principle -- fractional-reserve banking -- is then discussed in the third unit with a little story about Fred the Goldsmith.
- The fourth unit of this lesson discusses the why, how, and who of bank regulation.
- The fifth and final unit then examines the benefits and problems of fractional-reserve banking for the macroeconomy.
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MARGINAL FACTOR COST, MONOPSONY The change in total factor cost resulting from a change in the quantity of factor input employed by a monopsony. Marginal factor cost, abbreviated MFC, indicates how total factor cost changes with the employment of one more input. It is found by dividing the change in total factor cost by the change in the quantity of input used. Marginal factor cost is compared with marginal revenue product to identify the profit-maximizing quantity of input to hire.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store looking to buy either a flower arrangement in a coffee cup for your father or a how-to book on meeting people. Be on the lookout for malfunctioning pocket calculators.
Your Complete Scope
This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"Try not to become a man of success, but rather try to become a man of value. " -- Albert Einstein
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AEC
Annual Equivalent Costs
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