|
|
ADJUSTMENT, LONG-RUN AGGREGATE MARKET: Disequilibrium in the long-run aggregate market induces changes in the price level that restore equilibrium. If the price level is above the long-run equilibrium price level, economy-wide product market surpluses cause the price level to fall. If the price level is below the long-run equilibrium price level, economy-wide product market shortages cause the price level to rise. In both cases long-run equilibrium is restored. Price level changes induce changes in aggregate expenditures but NOT changes in real production. The reason is that long-run aggregate supply is full-employment real production, which is unaffected by the price level.
Visit the GLOSS*arama
|
|
|
|
|
Lesson 19: Money Creation | Unit 4: The Multiplier
|
Page: 18 of 23
|
|
Topic:
The Money Multiplier
|
|
|
Checkable deposits are only part of the money supply.- Looking only at checkable deposits, a $100 deposit gives us $1,000 with a deposit multiplier of 10.
However:- Money, in total, doesn’t expand by $1,000.
- First: Banks might keep a few excess reserves, which limits deposit and money creation.
- Second: Loans might leak out of checkable deposits and into savings deposits, which limits money creation.
- Third: Loans might leak out of checkable deposits and into cash, which limits reserves and money creation.
Note:- The Federal Reserve uses a complex money multiplier to control the amount of money circulating in the economy.
|
|
|
|
|
|
|
POLITICAL VIEWS Alternative perspectives of the proper role that government should play in the economy, with conservatives on the right, liberals on the left, and moderates in the middle. Libertarians show up to the right of conservatives and socialists (including Marxists and communists) are to the left of liberals.
Complete Entry | Visit the WEB*pedia |
|
|
BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time flipping through the yellow pages seeking to buy either a coffee cup commemorating next Thursday or a replacement remote control for your stereo system. Be on the lookout for strangers with large satchels of used undergarments.
Your Complete Scope
This isn't me! What am I?
|
|
|
More money is spent on gardening than on any other hobby.
|
|
|
"The greatest things ever done on Earth have been done little by little. " -- William Jennings Bryan
|
|
ECLA
Economic Commission for Latin America
|
|
|
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
|
|
