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EMPLOYMENT RATE: The ratio of employed persons to the total civilian noninstitutionalized population 16 years old or older. Also termed the employment-population ratio, the employment rate is used as an alternative indicator of the utilization of labor resources.

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Lesson 19: Money Creation | Unit 2: Fred Returns Page: 7 of 23

Topic: Paper Loans <=PAGE BACK | PAGE NEXT=>

Elizabeth needs a loan, but she doesn't want gold, she wants receipts, she wants money.Remember that:
  • Fred issues receipts only for deposits.
  • Can he just issue receipts?Two options:
  • One: Fred can loan gold from his safe, which Elizabeth can deposit for receipts.
  • Two: Fred can loan Elizabeth the receipts directly. Note that:
  • With both, Elizabeth ends up with receipts and Fred ends up with the same amount of gold in his safe.
  • With both, receipts are not all backed by gold: The loan increases the number of receipts in circulation.Fractional-reserve banking:
  • If every receipt is redeemed, then Fred is in trouble.
  • But Fred knows that only a fraction of the gold is redeemed at any given time.

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UNCERTAINTY

The observation and recognition that information, especially information about the future, is not known. While any number of events might occur in the future, uncertainty exists because which specific events will occur is unknown. A related concept is risk, which is assigning probabilities to potential future outcomes. Uncertainty is a central component in the economic study of information.

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PURPLE SMARPHIN
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Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club hoping to buy either a birthday gift for your grandmother or a T-shirt commemorating yesterday. Be on the lookout for telephone calls from former employers.
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The first paper currency used in North America was pasteboard playing cards "temporarily" authorized as money by the colonial governor of French Canada, awaiting "real money" from France.
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