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INDUSTRY: A collection of firms that produce similar products sold in the same market. The concept of industry is most often used synonymously with market in most microeconomic analysis. That is, the study of perfect competition or oligopoly is not only the study of market structures, but also the study of industrial structure.

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Lesson 19: Money Creation | Unit 3: Modern Banking Page: 12 of 23

Topic: Another Bank <=PAGE BACK | PAGE NEXT=>

  • 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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AVERAGE VARIABLE COST

Total variable cost per unit of output, found by dividing total variable cost by the quantity of output. When compared with price (per unit revenue), average variable cost (AVC) indicates whether or not a profit-maximizing firm should shut down production in the short run. Average variable cost is one of three average cost concepts important to short-run production analysis. The other two are average total cost and average fixed cost. A related concept is marginal cost.

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APLS

RED AGGRESSERINE
[What's This?]

Today, you are likely to spend a great deal of time calling an endless list of 800 numbers looking to buy either a remote controlled World War I bi-plane or a wall poster commemorating Thor Heyerdahl's Pacific crossing aboard the Kon-Tiki. Be on the lookout for telephone calls from former employers.
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Okun's Law posits that the unemployment rate increases by 1% for every 2% gap between real GDP and full-employment real GDP.
"The roots of education are bitter, but the fruit is sweet."

-- Aristotle, philosopher

SSAP
Statement of Standard Accounting Practice
A PEDestrian's Guide
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