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BUSINESS CYCLE MEASUREMENT: Three of the most noted and often used measures of business cycle activity are real gross domestic product (especially the growth rate), unemployment rate, and inflation rate. Another group of measures fall under the broad heading of economic indicators and include leading economic indicators, coincident economic indicators, and lagging economic indicators. Real sophisticated economic types also follow measures such as changes in business inventories, Producer Price Index, M2 money supply, durable goods order, and others.
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Lesson 18: Banking | Unit 3: Reserve Banking
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Page: 15 of 24
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The story continues when Elizabeth the Innkeeper needs to expand her business and ask Fred for a loan. The story: - Elizabeth's business is booming, but she is temporarily short of money, short of gold.
- She asks Fred for a loan of gold that belongs to Bill the Knight that Fred keeps on his safe.
- Elizabeth is willing to pay Fred a sizable fee for taking the risk of making this loan.
- Fred makes the loan.
- Elizabeth expands her inn, she repays the loan on schedule with interest with profit from business.
- Bill collects his gold upon returning.
- Other local merchants soon seek interest lending services from Fred.
Fred has discovered the lending function of modern banks.
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LEAKAGES LINE A graphical representation of the relation between the level of aggregate production and one or more leakages. The three leakages (non-consumption uses of the income generated from aggregate production) are saving, taxes, and imports. The leakages line sequentially adds, or layers, each of these three uses of income depending on the number of sectors used in the analysis (two, three, or four). The slope of the leakages line depends on which if any of the uses of income are induced by aggregate production. The leakages line is combined with the injections line (containing investment expenditures, government purchases, and exports) in the Keynesian injections-leakages model.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time at the confiscated property police auction seeking to buy either a birthday gift for your mother or a weathervane with a horse on top. Be on the lookout for cardboard boxes.
Your Complete Scope
This isn't me! What am I?
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"Defeat is simply a signal to press onward. " -- Helen Keller, author, lecturer
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VES
Variable Elasticity of Substitution
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