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GOLDSMITH MONEY CREATION: An illustration of the basic money creation process undertaken by banks using the hypothetical activities of a hypothetical goldsmith. The goldsmith profession of Medieval Europe provides insight into the modern banking business, including the seemingly magical ability of banks to create valuable money out of inputs with significantly less value.
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Lesson 13: Aggregate Demand | Unit 5: Policies Plus
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Page: 20 of 22
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The consumption, investment, government purchase, and net export determinants cause the aggregate demand curve to shift and lead to macroeconomic instability.- This instability is best viewed in terms of business cycles. The effects of business-cycle instability are:
- Recession. Means higher unemployment rates and related problems.
- Booming Expansion. Possibility of higher inflation rates and related problems.
Aggregate demand is the prime source of economic instability.
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TWO-SECTOR KEYNESIAN MODEL A Keynesian model of the macroeconomy that includes the two private sectors, the household sector and the business sector. This Keynesian model variation, often termed the basic Keynesian model or the private sector Keynesian model, captures the interaction between induced consumption expenditures and autonomous investment expenditures. This model is commonly used to illustrate the basic workings of Keynesian economics, including equilibrium, disequilibrium, and the multiplier. Equilibrium is identified as the intersection between the C + I line and the 45-degree line. Two related variations are the three-sector Keynesian model and the four-sector Keynesian model.
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Rosemary, long associated with remembrance, was worn as wreaths by students in ancient Greece during exams.
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"Leadership is based on inspiration, not domination; on cooperation, not intimidation. " -- William A. Ward
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SSRN
Social Science Research Network
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