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GREAT DEPRESSION: A period of time from 1929 to 1941 in which the economy experienced high rates of unemployment (averaging well over 10%), low production, and limited investment. This period of stagnation prompted radical changes in the way government viewed it's role in the economy and lead to our modern study of macroeconomics.

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Lesson 18: Banking | Unit 5: The Economy Page: 23 of 24

Topic: Problems <=PAGE BACK | PAGE NEXT=>

When banks are properly controlled they provide benefits, but when they get out of hand they can do a world of bad.

Problems:

  • When a bank fails to maintain adequate reserves, it runs the risk of starting a chain reaction that could cause economy-wide financial instability.

Instability:

  • Banking regulations have lessened, but not eliminated, banking instability problems.
  • Controlling instability is one challenge of monetary policy.

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MARGINAL FACTOR COST, PERFECT COMPETITION

The change in total factor cost resulting from a change in the quantity of factor input employed by a perfectly competitive firm. Marginal factor cost, abbreviated MFC, indicates how total factor cost changes with the employment of one more input. It is found by dividing the change in total factor cost by the change in the quantity of input used. Marginal factor cost is compared with marginal revenue product to identify the profit-maximizing quantity of input to hire.

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APLS

YELLOW CHIPPEROON
[What's This?]

Today, you are likely to spend a great deal of time calling an endless list of 800 numbers seeking to buy either a dozen high trajectory optic orange golf balls or a large red and white striped beach towel. Be on the lookout for jovial bank tellers.
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Approximately three-fourths of the U.S. paper currency in circular contains traces of cocaine.
"Lead the life that will make you kindly and friendly to everyone about you, and you will be surprised what a happy life you will lead."

-- Charles M. Schwab

TIAC
Thrift Institutions Advisory Council
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