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LAW: Generally accepted, verified, fundamental principle of nature. Laws have been tested and verified through the scientific method. As a house is constructed from concrete, lumber, and nails, a theory is constructed from laws. To be a fundamental law of nature, a principle must capture a cause-and-effect relationship about the workings of the world.
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Lesson 19: Money Creation | Unit 3: Modern Banking
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Page: 12 of 23
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- A purchase is made with a check written on the Amos National Bank.
- The store deposits the check in Bob's State Bank.
- Bob's Bank adds $90 worth of liabilities to the store's account.
- This liability is balanced with reserves transferred from Amos National Bank.
- Amos National losses $90 of reserves and Bob's Bank gains $90 of reserves.
- Amos National ends up with $10 of reserves and a $90 loan.
- Bob's Bank has $90 in reserves. It must keep 10% ($9), giving Bob's Bank $81 of excess reserves.
- Bob's Bank makes an $81 loan to a customer who wants to buy a CD player.
- Once again, this process creates $81 worth of money.
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MARGINAL REVENUE PRODUCT The change in total revenue resulting from a unit change in a variable input, keeping all other inputs unchanged. Marginal revenue product, usually abbreviated MRP, is found by dividing the change in total revenue by the change in the variable input or by multiplying marginal physical product by marginal revenue. This is also termed value of the marginal product. Marginal revenue product is a key concept for understanding the demand for productive inputs.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales hoping to buy either several magazines on fashion design or a package of 3 by 5 index cards, the ones without lines. Be on the lookout for infected paper cuts.
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This isn't me! What am I?
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The standard "debt" notation I.O.U. does not mean "I owe you," but actually stands for "I owe unto..."
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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DDA
Demand Deposits Accounts
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