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AMORTIZATION: The process of paying off a debt liability and accrued interest through a series of equal, periodic payments. Car loans and mortgages are two debts commonly paid off through amortization. Your monthly car payment, for example, partially pays for interest accrued on the outstanding balance and partly reduces that balance. Because one payment reduces the outstanding balance, each subsequent payment has a smaller portion for interest. If the proper amortization schedule has been calculated, your loan will be paid off with the last payment.

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Lesson 18: Banking | Unit 3: Reserve Banking Page: 17 of 24

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  • The concept of fractional-reserve banking, which implies that deposits are used for loans and that banks must keep reserves to back deposits.
  • The three types of reserves:
    • Legal reserves, which are vault cash and deposits with the Federal Reserve.
    • Required reserves, which are the vault cash and deposits with the Federal Reserve that regulators say a bank must keep for daily transactions.
    • Excess reserves, which are any legal reserves over and above required reserves.
  • That banking sort of evolved from the goldsmithing profession.
  • How Fred stumbled upon the depository function of modern banks.
  • How Fred discovered the lending function of modern banks.
  • How Fred discovered modern fractional-reserve banking.

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TAX MULTIPLIER

A measure of the change in aggregate production caused by changes in government taxes. The tax multiplier is the negative marginal propensity to consume times one minus the slope of the aggregate expenditures line. The simple tax multiplier includes ONLY induced consumption. More complex tax multipliers include other induced components. Two related multipliers are the expenditures multiplier, which measures the change in aggregate production caused by changes in an autonomous aggregate expenditure, and the balanced-budget multiplier which measures the change in aggregate production from equal changes in both taxes and government purchases.

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APLS

BEIGE MUNDORTLE
[What's This?]

Today, you are likely to spend a great deal of time flipping through the yellow pages seeking to buy either a coffee cup commemorating next Thursday or a replacement remote control for your stereo system. Be on the lookout for strangers with large satchels of used undergarments.
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This isn't me! What am I?

Rosemary, long associated with remembrance, was worn as wreaths by students in ancient Greece during exams.
"The greatest things ever done on Earth have been done little by little. "

-- William Jennings Bryan

MMSE
Minimun Mean Square Error
A PEDestrian's Guide
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