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RISK AVERSE: A person who values a certain income more than an equal amount of income that involves risk or uncertainty. To illustrate, let's say that you're given two options--(A) a guaranteed $1,000 or (b) a 50-50 chance of getting either $500 or $1,500. If you chose option A, then you're risk averse. Both options give you the same "expected" values. In other words, if you select option B a few hundred times, then your average amount over those few hundred times is $1,000.
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Lesson 18: Banking | Unit 5: The Economy
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Page: 22 of 24
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Banks have two beneficial roles in the economy. First: As financial intermediaries, banks match up savers and borrowers. - They are an effective means of diverting household income into investment expenditures for capital goods.
- They are a vital link between the real and financial sides of the economy.
Second: As depository institutions, banks supervise a share of the nation's M1 money supply. - They have a big responsibility because money is critical to a complex, market-oriented economy.
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SUPPLY BY A FIRM The range of quantities of a factor that a firm is willing and able to sell at a range of factor prices. Supply by a firm is a phrase that is most relevant to the study of factor markets, especially when contrasted with supply to a firm. Supply by a firm puts the firm on the selling side of the factor market. Supply to a firm puts the firm on the buying side of the factor market.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time at a flea market hoping to buy either an ink cartridge for your printer or a rechargeable battery for your camera. Be on the lookout for the happiest person in the room.
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This isn't me! What am I?
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In 1914, Ford paid workers who were age 22 or older $5 per day -- double the average wage offered by other car factories.
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"Experience keeps a dear school, but fools will learn in no other. " -- Benjamin Franklin
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MU
Marginal Utility
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