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AGGREGATE OUTPUT: The macroeconomy's total production of final goods and services. You might recognized it by it's official term gross domestic product. Another related term is aggregate supply. This is the total production in the economy that is purchased by the four basic economic sectors -- household, business, government, and foreign. See also aggregate market, aggregate demand, aggregate expenditures.
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Lesson 18: Banking | Unit 1: What It Is
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Page: 2 of 24
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There are several types of financial intermediaries. Note that: - Intermediaries bring together buyers and sellers.
- Buyers and sellers often need an intermediary.
- Banks perform a 'financial' intermediary function.
- By maintaining financial deposits and making financial loans, banks navigate the financial side of the economy.
Other types of financial intermediaries include: - Insurance agencies, stock brokers, finance companies, mutual funds, and bond traders.
Their function: - All these entities divert household income away from consumption expenditures to investment.
- Banks are important because they maintain checking accounts that are about 60% of the money supply.
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AGGREGATE DEMAND SHIFTS Changes in the aggregate demand determinants cause the aggregate demand curve to shift. The mechanism is comparable to that for market demand determinants and market demand. There are two alternatives--an increase in aggregate demand and a decrease in aggregate demand. An increase in spending by any of the four sectors--household, business, government, and foreign--shifts the aggregate demand curve to right. A decrease in spending by these four sectors shifts the aggregate demand curve to left.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time wandering around the downtown area seeking to buy either a wall poster commemorating next Thursday or a pair of gray heavy duty boot socks. Be on the lookout for letters from the Internal Revenue Service.
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Junk bonds are so called because they have a better than 50% chance of default, carrying a Standard & Poor's rating of CC or lower.
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"You are never given a dream without also being given the power to make it true." -- Richard Bach, Author
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AIFT
American Institute for Foreign Trade
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