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REQUIRED RESERVES: The amount of vault cash and/or Federal Reserve deposits that a bank must legally keep to back outstanding deposits. These are the assets that bank regulators specify a bank must have to ensure the stability of deposits and conduct daily transactions.
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Lesson 1: Economic Basics | Unit 4: Goals
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Page: 11 of 18
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The three macro goals are most important in the study of the macroeconomics:- Full employment: This is when all available resources (labor, capital, land, and entrepreneurship) are used to produce goods and services. It enables more production that can reduce the scarcity problem.
- Stability: This is avoiding or limiting fluctuations in production, employment, and prices. It reduces uncertainty of the future.
- Growth: This is increasing the economy's ability to produce goods and services. It improves living standards and better addresses the scarcity problem.
The two micro goals are most important in the study of the microeconomics:- Efficiency: This is getting the highest amount of satisfaction from available resources. Efficiency is achieved when society cannot change the distribution of resources in any way that would increase the total amount of satisfaction obtained by society.
- Equity: This is the fairness with which income or wealth is distributed within a society. Equity occurs when income or wealth is fairly distributed. But the standards of fairness differ and puts us into normative economics.
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SLOPE, AGGREGATE EXPENDITURES LINE The positive slope of the aggregate expenditures line is the sum of the marginal propensity to consume (MPC), marginal propensity to invest (MPI), and marginal propensity for government purchases (MPG), less the marginal propensity to import (MPM). This slope is greater than zero but less than one, reflecting induced expenditures by the four macroeconomic sectors (household, business, government, and foreign). The slope of the aggregate expenditures line determines the magnitude of the multiplier process.
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PINK FADFLY
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Today, you are likely to spend a great deal of time lost in your local discount super center seeking to buy either a replacement remote control for your television or a replacement nozzle for your shower. Be on the lookout for the last item on a shelf.
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The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
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"When we do the best we can, we never know what miracle is wrought in our life or in the life of another. " -- Helen Keller, lecturer, author
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