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January 19, 2019 

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MARKETING MIX: The combination of 5 controllable variables consisting of product, price, promotion, distribution and packaging to satisfy the needs and wants of customers in a targeted market. This requires the collection of data and demographics on customers in potential markets. Organizations may use multiple marketing mixes strategies based on different targeted market segments.

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Lesson Contents
Unit 1: A Little Magic
  • Money
  • Banks
  • Money Creation
  • Unit 1 Summary
  • Unit 2: Fred Returns
  • Review
  • Currency
  • Paper Loans
  • Money Creation
  • Unit 2 Summary
  • Unit 3: Modern Banking
  • Fractional-Reserve Magic
  • Injection
  • Another Bank
  • Yet Another Bank
  • Total Creation
  • Unit 3 Summary
  • Unit 4: The Multiplier
  • The Concept
  • Reserve Ratio
  • Money Multiplier
  • Unit 4 Summary
  • Unit 5: Policy
  • Control
  • Unit 5 Summary
  • Course Home
    Money Creation

    The magic of money creation as practiced by private banks is the topic of this lesson. While it seems like magic, money creation is a fundamental aspect of fractional-reserve banking. As such, in this lesson we take a look at why and how banks create money (a task they would seem to be the exclusive privilege of government). This examination of money creation provides insight into how government is able to control the economy's money supply.

    • The first unit introduces the magic of money creation, as practiced by the banking system.
    • The second unit presents a hypothetical example of money creation as practiced by Fred the Goldsmith, where the money is different, but the process is comparable to modern banks.
    • The third unit of this lesson, then examines a detailed example of how the banking system goes about creating money when it has an injection of excess reserves.
    • In the fourth unit, the money creation process is summarized in terms of a deposit multiplier, which a thought or two on how this can be expanded to a money multiplier, which interests government as it seeks to control the money supply.
    • The last unit of this lesson examines the money creation process in the context of monetary policies and government control of the money supply.

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    INTERCEPT, CONSUMPTION LINE

    The intercept of the consumption line indicates autonomous consumption, consumption that does not depend on the level of income or production. This can be thought of as the baseline level of consumption that would be undertaken if income falls to zero. Autonomous consumption is affected by the consumption expenditures determinants, which cause a change in the intercept and a shift of the consumption line. The value of the intercept of the saving line is the negative of the value of the intercept of the saving line.

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    APLS

    PURPLE SMARPHIN
    [What's This?]

    Today, you are likely to spend a great deal of time lost in your local discount super center looking to buy either a computer that can play music and burn CDs or a T-shirt commemorating last Friday (you know why). Be on the lookout for attractive cable television service repair people.
    Your Complete Scope

    This isn't me! What am I?

    Lombard Street is London's equivalent of New York's Wall Street.
    "You are never given a dream without also being given the power to make it true."

    -- Richard Bach, Author

    BEA
    Bureau of Economic Analisys
    A PEDestrian's Guide
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