|
LIMITED LIABILITY: A condition in which owners are not personally held responsible for the debts of by a firm. Corporations are the main form of business in which owners have limited liability. The primary benefit of limited liability is that it makes it possible for a business to accumulate large amounts of productive resources that lets it take advantage of large scale production.
Visit the GLOSS*arama
|
|
|
|
Lesson 19: Money Creation | Unit 3: Modern Banking
|
Page: 13 of 23
|
Topic:
Yet Another Bank
|
|
|
- A purchase is made with a check written on Bob's State Bank, which is deposited in Charley's Credit Union.
- Charley's Credit Union adds $81 worth of liabilities to the store's account.
- This liability is balanced with reserves transferred from Bob's Bank.
- Bob's Bank losses $81 and Charley's Credit Union gains $81 of reserves.
- Bob's Bank ends up with $9 of reserves and an $81 loan.
- Charley's Credit Union has $81 in reserves. It keeps 10% ($8.10), giving it $71.90 of excess reserves.
- Charley's Credit Union makes a $71.90 loan to a customer.
- This creates $71.90 of money. The three banks have created $242.90 worth of money.
|
|
|
|
|
|
MACROECONOMIC MARKETS Three sets of markets that make up the macroeconomy--product, financial, and resource--which exchange the three primary types of macroeconomic commodities--gross production, legal claims, and factor services. The four macroeconomic sectors--household, business, government, and foreign--interact through these three sets of markets. The primary objective of macroeconomic theories is to explain activity that takes place in these three sets of markets.
Complete Entry | Visit the WEB*pedia |
|
|
RED AGGRESSERINE [What's This?]
Today, you are likely to spend a great deal of time at the confiscated property police auction looking to buy either a set of luggage with wheels or a birthday gift for your aunt. Be on the lookout for malfunctioning pocket calculators. Your Complete Scope
This isn't me! What am I?
|
|
Okun's Law posits that the unemployment rate increases by 1% for every 2% gap between real GDP and full-employment real GDP.
|
|
"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. " -- Steve Jobs, Apple Computer founder
|
|
LPG Liquid Petroleum Gas
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|