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VAULT CASH: Paper currency and metal coins possessed by a commercial bank, either stored in the actual bank vault or temporarily resting teller drawers. Vault cash is primarily used to facilitate daily bank transactions (that is, cashing checks), and together with Federal Reserve deposits make up legal bank reserves.

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Lesson 2: Economic Science | Unit 2: Theory Page: 7 of 20

Topic: Economic Theories <=PAGE BACK | PAGE NEXT=>

Three common economic theories:
  • Markets theory: It helps us understand how and why prices change, shortages and surpluses occur, and markets are monopolized.
  • Aggregate Markets theory: It uses principles and concepts developed in the theory of markets, but adapts them to the study macroeconomic things like inflation, unemployment, national production, and business cycles.
  • Keynesian theory: Named after it's creator John Maynard Keynes, it was developed to explain high rates of unemployment and other economic conditions that existed during the Great Depression of the 1930s.

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AGGREGATE DEMAND DETERMINANTS

An assortment of ceteris paribus factors other than the price level that affect aggregate demand, but which are assumed constant when the aggregate demand curve is constructed. Changes in any of the aggregate demand determinants cause the aggregate demand curve to shift. The specific ceteris paribus factors are commonly grouped by the four, broad expenditure categories--consumption expenditures, investment expenditures, government purchases, and net exports.

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PURPLE SMARPHIN
[What's This?]

Today, you are likely to spend a great deal of time browsing through a long list of dot com websites looking to buy either a three-hole paper punch or decorative picture frames. Be on the lookout for infected paper cuts.
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This isn't me! What am I?

In the early 1900s around 300 automobile companies operated in the United States.
"There comes a time when the mind takes a higher plane of knowledge but can never prove how it got there. "

-- Albert Einstein, physicist

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