Google
Friday 
January 19, 2018 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
GOVERNMENT POLICIES: Government actions designed to affect economic activity and pursue one or more economic goals. Also called economic policies. The four common types of government policies are: fiscal, monetary, regulatory, and judicial.

Visit the GLOSS*arama

Most Viewed (Number) Visit the WEB*pedia

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.

    BEGIN Lesson =>


    <=PREVIOUS Lesson | NEXT Lesson =>

    ALLOCATION EFFECT

    A change in the allocation of resources caused by placing taxes on economic activity. By creating disincentives to produce, consume, or exchange, taxes generally alter resource allocations. The allocation effect is typically used when governments seek to discourage the production, consumption, or exchange of particular goods or activities that are deemed undesirable (such as tobacco use or pollution). This is one of two effects of taxation. The other (primary) is the revenue effect, which is the generation of revenue used to finance government operations.

    Complete Entry | Visit the WEB*pedia


    APLS

    BROWN PRAGMATOX
    [What's This?]

    Today, you are likely to spend a great deal of time strolling through a department store trying to buy either software that won't crash your computer or any book written by Stephan King. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.
    Your Complete Scope

    This isn't me! What am I?

    More money is spent on gardening than on any other hobby.
    "You are never given a dream without also being given the power to make it true."

    -- Richard Bach, Author

    BAE
    Bureau of Agricultural Economics
    A PEDestrian's Guide
    Xtra Credit
    Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

    User Feedback



    | AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
    | About Us | Terms of Use | Privacy Statement |

    Thanks for visiting AmosWEB
    Copyright ©2000-2018 AmosWEB*LLC
    Send comments or questions to: WebMaster