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ACCESSIBILITY: The location of economic activity (especially in terms of land) relative to other activities. As real estate agents are prone to say, "The three most important factors in real estate are 'location, location, location.'" Accessibility determines how easy or difficult (read this as costly) it is to allocate good, services, and resources. Transportation is a key factor in accessibility. Efficient, low cost transportation systems improve accessibility.
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Lesson 11: Circular Flow | Unit 2: Financial Markets
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Page: 10 of 22
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- The main function of financial markets, which is to divert national income from household consumption to business investment.
- The difference between the real or physical side of the economy (the production of goods that satisfy wants and needs) and the paper or financial side (legal claims on or ownership of physical resources, goods, and production).
- How income is diverted from legal-claim buyer to legal-claim seller through the financial markets.
- Why saving can be thought as a nonconsumption use of income, as making a loan, or as supplying income to the financial markets in exchange for a legal claim.
- Two basic reasons to save: (1) in return for an interest payment or (2) to accumulate income that can be spent later.
- Investment, which is business sector expenditures on gross domestic product for capital goods.
- How the business sector borrows income through financial markets and uses this income flow to finance capital investment.
- Why adding saving, investment, and financial markets does not change the total volume of the circular flow.
- That imbalances between saving and investment trigger economic stability, business cycles, unemployment, and inflation.
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EXPANSIONARY MONETARY POLICY A form of monetary policy in which an increase in the money supply and a reduction in interest rates are used to correct the problems of a business-cycle contraction. In theory, expansionary monetary policy can include buying U.S. Treasury securities through open market operations, a decrease in the discount rate, and a decrease in reserve requirements. In theory, open market operations are the primary tool of expansionary monetary policy. Expansionary monetary policy is often supported by expansionary fiscal policy. An alternative is contractionary monetary policy.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales hoping to buy either several magazines on fashion design or a package of 3 by 5 index cards, the ones without lines. Be on the lookout for infected paper cuts.
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This isn't me! What am I?
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Helping spur the U.S. industrial revolution, Thomas Edison patented nearly 1300 inventions, 300 of which came out of his Menlo Park "invention factory" during a four-year period.
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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ILO
International Labor Office
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